### Comment:
Well it's possible for students loans to get forgiven right? Couldn't you write options on the probability of that happening?

### REPLY:
That depends on if forgiveness involves stiffing the creditor or not. 
  
 Really, it's pretty moot, because (AFAIK) student loans are &gt;90% federally backed, and we're not bundling them into graded securities and selling them between banks, nor are we providing insurance on the delinquency rate. Even those two things wouldn't be that bad, as delinquency rates are likely to be far less dependent and cascading than housing prices and mortgage default.

### END.