SoFi Technologies (NASDAQ:SOFI) stock is slipping on Tuesday and may see further falls this week ahead of student loan news.
The current federal student loan moratorium is set to expire on May 1. When that happens, millions of Americans will have to start paying their loans again. That would be a benefit for SOFI stock as it generates revenue through student loan refinancing.
Unfortunately for SOFI stock, that’s unlikely to happen. Lawmakers have been pushing President Joe Biden’s administration to enact another extension of the student loan moratorium. The current talk is that this will extend the moratorium to at least August.
So what does that mean for SOFI stock? Without the requirement to repay federal student loans, borrowers are unlikely to seek it out for refinancing. That’s something we’ve already seen as SoFi’s student loan generation has declined over the last couple of years.
The pause on student loan repayments was first put into place by Congress through the Cares Act in 2020. Since then, both President Donald Trump and the Biden administration have extended the moratorium as the Covid-19 pandemic continued to stifle the U.S. economy.
With the current message from the Biden administration being that the economy is strongly recovering, it makes sense to end to moratorium. However, elections are coming up this November and many Democrats seek to keep the moratorium in place through the end of the year. Others are hoping to extend it even further as a precursor to student loan forgiveness.
With all of this still up in the air, investors will want to keep an eye on SOFI stock in the coming days!
SOFI stock is down 5% as of Tuesday afternoon.
There’s more stock market news for investors to check out below!
We’ve got all the hottest stock news to get traders through Tuesday! Among that is Cassava Sciences (NASDAQ:SAVA) stock slipping, an AT&T (NYSE:T) catalyst, as well as why System1 (NYSE:SST) shares are rising today. You can find out all about these matters at the links below!
More Stock Market News for Tuesday
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- Why Is System1 (SST) Stock Up Today?
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.