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Well, I've been talking about the loans themselves, which by definition are not "assets": "Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset. Simply stated, assets represent ownership of value that can be converted into cash..." (http://en.wikipedia.org/wiki/Asset).

Therefore securities built on top of these loans, such as the pools you refer to in your link, are by definition not "asset-backed-securit[ies]". They are instead backed by e.g. the laws and regulations that make them non-dischargeable ... and I contend that's a major reason why they are non-dischargeable.

I don't mean to spam you with Sallie Mae links, but clearly you can see the heading of this page...


From one of the links: "... financial characteristics and servicing information related to the underlying student loan assets...."

The student loans themselves are assets (the fit the above definition), my point is that they themselves are not asset based like a house or car loan.

Sallie Mae's use of the term "asset" here might be slightly misleading, but being essentially part of the government they can get away with it.

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