Biden's student loan package gives SoFi a boost
- Lucinda Shen, author of Axios Pro: Fintech Deals
The release of President Biden's long-awaited student-loan relief package made a lot of borrowers happy this week. It put a momentary smile on SoFi investors' faces, too.
Why it matters: The administration is creating ripple effects across the fintech industry, ushering in tougher financial regulators, higher interest rates, and shaking up the student loan space.
Context: SoFi is a fintech lender that got its start in student loan refinancing, which remains a significant part of its business.
Driving the news: SoFi's stock popped 4% on Thursday after the Biden student loan plan was released (though it was down 6% around noon on Friday amid a broader tech sell-off on Fed comments).
- Analysts also believe the package will give borrowers more certainty, reviving demand for student loan refinancing.
Yes, but: It's still unclear to what extent refinancing volumes will return. Year to date, SoFi shares have fallen 60% to around $6 per share.