SoFi (NASDAQ:SOFI) stock is in focus today as the Nov. 15 deadline for students to apply for loan forgiveness quickly approaches. Borrowers who earn less than $125,000 per year in income are eligible for $10,000 of federal student loan debt forgiveness. Married couples who jointly earn less than $250,000 per year are eligible for $10,000 of debt forgiveness as well. On top of that, Pell grant recipients are eligible for an additional $10,000 of debt cancellation, bringing the maximum cancellation amount per person to $20,000.
Earlier this month, all-in-one financial platform SoFi reported its third-quarter earnings. For the period, revenue tallied in at $419 million, up 51% year-over-year (YOY). Total origination volume also climbed 2% YOY to $3.48 billion. About 13% of that, or $457.18 million, was derived from student loans, a decrease of 53% YOY. Notably, third-quarter student loan volume is still down by over 50% compared to the average pre-pandemic volume due to the effects of the federal student loan moratorium. President Joe Biden has said the moratorium will expire on Dec. 31, however, with payments expected to resume the following day.
Here’s what investors should be watching with SOFI stock moving forward.
Dear SOFI Stock Fans, Mark Your Calendars for Nov. 15
Currently, over 40 million student loan borrowers cumulatively owe more than $500 billion in debt, according to ABC News. Around 8 million of those borrowers will automatically receive forgiveness because the U.S. Department of Education “already has their income information.” Technically, these borrowers have until the end of the year to apply for forgiveness. However, experts believe that applying sooner “could lower your loan payments or erase your balance all together.” Robert Farrington, founder of The College Investor, adds:
“The urgency is simple: the administration wants to forgive as much debt as possible as quickly as possible […] It’s really hard to put the cat back in the bag. Once forgiveness actually starts on loans, it would be very hard for anyone to stop it.”
Student loan forgiveness is not beneficial for SoFi due to its student loan financing and refinancing programs. Still, CEO Anthony Noto has taken the moral high ground, explaining that he supports forgiveness for “distressed and defaulted borrowers.” Noto also believes that high levels of student debt are a major problem for the United States. In a note written last March, the CEO stressed that “SoFi will be fine either way” in light of student loan forgiveness.
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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.
