Shares of SoFi (NASDAQ:SOFI) stock are in the green by 4% today after a report from the The Washington Post said the White House was nearing a decision to cancel at least $10,000 of student loan debt per borrower. Sources close to the matter said the debt forgiveness would “apply to Americans who earned less than $150,000” in 2021. The debt forgiveness would also apply to married couples filing jointly who earned less than $300,000 last year.
However, White House spokesman Vedant Patel called the report “inaccurate.” Patel stated the following:
“No decisions have been made yet. But as a reminder, no one has been required to pay a single dime of student loans since the president took office.”
Patel did not outright deny the report, but instead said the decision is still up in the air. Meanwhile, SoFi Technologies CEO Anthony Noto is an adamant supporter of student debt forgiveness.
SOFI Stock: CEO Anthony Noto Supports Student Loan Forgiveness
Recently, Noto cited a personal anecdote about how even some of the most successful people can still have lingering student loan debt for years. A $10,000 debt forgiveness could mean less revenue for SoFi. However, the company is taking a moralistic approach, recommending debt forgiveness.
SoFi was also in favor of the White House’s recent decision to extend the federal student loan moratorium to August 31. However, SoFi argued it should only apply to those facing “severe hardship,” putting the “affluent and capable back into repayment.”
SoFi only recommends debt forgiveness for borrowers in high distress. It also says the extension and potential $10,000 debt forgiveness will not significantly affect its business. The company cited record high 2021 revenue and its profitability status. The company added:
“It’s time to do the harder, right thing instead of the easier path of kicking the can down the road, and wasting taxpayer money.”
Roughly 43 million people in the U.S. carry an estimated total of $1.5 trillion in federal student loan debt. Former Federal Deposit Insurance Corporation (FDIC) chair Sheila Bair says $10,000 forgiveness will wipe out debt for 12.8 million people. Additionally, the forgiveness would cut student loan debt in half for 7.7 million people.
On the date of publication, Eddie Pan did not hold (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.