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SoFi Technologies Inc (NASDAQ:SOFI) shares are pulling back on Wednesday after surging more than 3% on Tuesday following reports that the Trump administration may sell portions of the federal government’s $1.6 trillion student loan portfolio to private lenders.
What’s To Know: Senior officials at the Treasury and Education Departments have discussed selling parts of the government’s student loan portfolio with finance industry executives and are considering hiring an outside firm or bank to analyze its value, Politico reported this week, citing three unnamed sources familiar with the discussions.
The report sparked a rally in SoFi’s stock, even as the broader S&P 500 declined. SoFi, which offers student loan refinancing alongside investing and banking services, could benefit if the federal government reduces its lending role.
CEO Anthony Noto said during an April earnings call that if the government steps back from providing in-school loans and GRAD Plus loans, the company would “absolutely capture that opportunity.” He added the company would “love to do as much as we can in that market.”
The discussions come as the Trump administration has eliminated some borrower protections, including restarting collections on defaulted student loans paused during the COVID-19 pandemic, as reported by Forbes. An unnamed senior administration official told Politico the administration is “committed to analyzing all aspects of the federal student loan portfolio” and is “focused on ensuring the long-term health of the portfolio for the benefit of both students and taxpayers.”
New federal student loan caps signed into law by President Donald Trump in July are also expected to drive borrowers toward private lenders. Parent PLUS loans were capped at $65,000 per student, $100,000 per graduate student and $200,000 per professional student, with annual limits taking effect July 1, 2026.
Under the Higher Education Act, the Education Department can only sell federal student loans after consulting with the Treasury department, and may only proceed if it wouldn’t cost taxpayers money.
SOFI Price Action: SoFi shares were down 0.98% at $27.86 at the time of publication on Wednesday, according to Benzinga Pro.
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