SoFi (NASDAQ:SOFI) stock is on the move Wednesday as investors react to news of a debt ceiling deal that could benefit the company.
The big news here is the negotiators are closing in on a deal that would increase the debt ceiling. As part of that deal, federal student loan payments would resume at the end of August. These have been on hold for the last three years as part of the Cares Act passed at the start of the Covid-19 pandemic.
When the pause on repayments ends, that would result in roughly 40 million people having to start making payments on their federal student loans. Some investors might be wondering why this is good news for SOFI stock.
What This Means for SOFI Stock
One of the main focuses of SoFi is the refinancing of both federal and private student loans. Considering that federal student loan repayment has been paused for the last three years, people have fewer reasons to consider refinancing their loans.
When those repayments restart, it’s likely that SoFi will see federal student loan holders considering refinancing. That could be a boon to the company’s loan business, which would likely help out SOFI stock as well.
Investors are excited about this prospect as heavy trading occurs with them buying shares today. As of this writing, more than 59 million shares of the stock have changed hands. That’s already well above the company’s daily average trading volume of about 36 million shares.
SOFI stock is up 11.3% on Wednesday morning.
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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.
