Investing.com -- SoFi Technologies Inc. (NASDAQ:SOFI) shares are sliding despite the Education Department's directive that student loan repayments will resume in October.
Shares of Sofi were down 1% in Tuesday trading. Last Friday, the stock caught two downgrades. Bank of America cut it to Neutral from Buy but raised its price target to $10. Piper Sandler cut its rating to Neutral from Overweight and raised its price target to $8. The shares are up 84% this year and traded around $8.52 on Tuesday afternoon.
SoFi is seen as a beneficiary when loan payments resume after being paused during the pandemic. On Tuesday, the Education Department put a notice on its website saying a new law recently enacted would prevent further extensions of the payment pause. "Student loan interest will resume starting on Sept. 1, 2023, and payments will be due starting in October. We will notify borrowers well before payments restart," the notice said.
Around 40 million people owe money for their education.
Many borrowers are still awaiting the Supreme Court's decision in a case seeking to block the Biden administration's plan to forgive billions of dollars in federal student loan debt. That decision is expected by the end of the month as the high court wraps up its year. The plan could help cancel some debt for millions of people, and for 14M of them, outstanding balances could be eliminated.
Some analysts are still bullish on Sofi's outlook. Last week, BTIG Research cited the potential upside coming from the end to the student loan payment moratorium. The firm started coverage of the fintech with a buy rating and $14 price target, saying "we believe few names are as attractive in the consumer-focused fintech space."