New Business Opportunities for SoFi: Expanding Private Market as U.S. Government Scales Back Student Loan Support
On July 4, 2025, the "One Big Beautiful Bill" was enacted. The bill includes provisions to reduce the government's role in student loans.
In the new student loan lending market, government-provided federal student loans account for a 92-93% share.
The background to this high market share includes institutional characteristics such as "lenient screening (credit scores are not prioritized)," "relatively low interest rates," and "flexible repayment methods." On the other hand, it has been pointed out that these systems create distortions such as the following:
・Many student loans are not repaid and easily become non-performing loans → Increase in government burden
・Easy borrowing from the government → Soaring university tuition fees
Therefore, to reduce the government's role and strengthen its position as a regulator, the following changes will be implemented starting July 1, 2026.
・Graduate PLUS Loan (unlimited loans for graduate students)
－Program abolished
※Current law: Full amount including tuition and living expenses can be borrowed
・Graduate Loan (new system for graduate student loans)
－For Master's programs: Up to $20,500 per year / $100,000 total
－For professional programs (law, medicine, dentistry, etc.): Up to $50,000 per year / $200,000 total
・Parent PLUS Loan (loans for parents with children in college)
－Up to $20,000 per year / $65,000 total per child
※Current law: Full amount including tuition and living expenses can be borrowed
With the enactment of this bill, it is expected that over $10 billion in new annual student loan lending capacity will be opened to the private sector.(However, since a clause applies that allows those who began borrowing before June 30, 2026, to continue using the traditional unlimited loans for up to three years, it is expected that a full transition will take some time.)
According to SoFi, the company holds a 60-70% share of the student loan refinancing market.SoFi's student loan origination volume in 2024 was $3.78 billion, primarily driven by refinancing. If the company can capture a high share of this newly opened market, it would significantly boost SoFi's current student loan origination volume. Furthermore, capturing promising young individuals at an early stage through student loan offerings will lead to the long-term expansion of SoFi's customer base.
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