The short-seller, Steve Eisman of FrontPoint Partners, is perhaps best known as being immortalized in Michael Lewis’ book, “The Big Short: Inside the Doomsday Machine,” as having warned about the sub-prime mortgage mess when nobody cared. He is scheduled to testify today in front ot the Senate Committee on Health, Education, Labor and Pensions.
Eisman has recently noted:
“Until recently, I thought that there would never again be an opportunity to be involved with an industry as socially destructive as the subprime mortgage industry. I was wrong. The for-profit education industry has proven equal to the task.”
With Title IV student loans, “the government, the students and the taxpayers bear all the risk and the for-profit industry reaps all of the rewards.”
“We have every expectation the industry’s default rates are about to explode.”