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SoFi Technologies shares were falling on Friday.
Justin Sullivan/Getty Images
SoFi Technologies
stock was falling after the Supreme Court blocked President Joe Biden’s plan for student loan forgiveness.
What’s bad for borrowers could be good for the financial services company, but that wasn’t enough to lift shares higher in Friday trading. The stock fell 2.7% to $8.48 in recent Friday trading, while the
S&P 500
rose 1.2%. So far this year,
SoFi
has gained 81%.
The student loan forgiveness plan was designed to forgive up to $20,000 in student debt for some borrowers, and data from the U.S. Census Bureau said the plan would’ve eliminated balances for 29% of federal student loan borrowers.
Though disappointing for borrowers, Friday’s decision could benefit SoFi (ticker: SOFI). Here’s why: In its most recent quarter, the financial services company saw student-loan originations slide 47% year over year, illuminating an obvious place for growth when loan payments resume and borrowers refinance.
If the loan forgiveness plan had passed, some of that market for refinancing would have disappeared—now that market remains an opportunity.
But the stock’s decline Friday suggests that investors were expecting this decision—indicating it might have already been priced into the stock—or that refinancing won’t be the boost the company expects it to be.
J.P. Morgan voiced such concerns earlier this week. On Thursday, analysts led by Reginald Smith wrote that SoFi might be too optimistic about a refinancing windfall….
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