Core Insights - High school seniors entering college in fall 2026 will encounter a transformed federal student loan landscape due to the 'One Big Beautiful Bill' which implements significant changes effective July 1, 2026 [1][2] Loan Limits - Stricter loan limits will be imposed on Parent PLUS loans, allowing families to borrow only up to $20,000 per year with an aggregate limit of $65,000 per child, contrasting with the current system that has no aggregate limit [4][5] - Nearly 30% of Parent PLUS loan borrowers will be impacted by these new limits, primarily affecting middle-to-higher income families not eligible for Pell Grants [5][6] Repayment System Changes - A new repayment system will be introduced for college students taking loans after July 1, 2026, which will differ significantly from current options [7][9] - Borrowers will be placed in a standard repayment plan based on their loan size, with repayment periods ranging from 10 to 25 years [11][12] - The new Repayment Assistance Plan (RAP) will replace two existing income-driven repayment plans by 2028, potentially increasing monthly payments for lower-income borrowers compared to current plans [13][14]

Core Viewpoint - SoFi Technologies Inc. has experienced a significant stock increase of approximately 45% in the past month, driven by potential legislative changes that may redirect student loan demand from federal programs to private lenders [1]. Legislative Impact - The proposed "One Big Beautiful Bill Act" (OBBBA) aims to limit federal student loans for graduate students by terminating the Graduate PLUS loan program and imposing stricter borrowing limits on other graduate programs, presenting a multi-billion dollar opportunity for fintech companies like SoFi [2]. Market Opportunity - Should the bill pass, it could shift up to $14 billion in student loan demand from the federal government to private lenders, potentially generating up to $700 million in loan origination fees and an additional $1.8 billion in annual interest income for companies like SoFi and Sallie Mae [3]. Market Dynamics - Not all of the $14 billion may transition to private lending due to qualification issues and the bill's proposal to raise federal loan limits for professional programs, which could reduce demand for private alternatives [4]. Current Market Position - SoFi has primarily focused on refinancing loans for post-graduate individuals, with the current market for private loans for graduate students estimated at around $1 billion annually, dominated by Sallie Mae and Navient Corporation [5]. Future Growth Potential - Despite its smaller current footprint, SoFi is positioned to benefit from market shifts, with the potential to capture an additional 10 percentage points of the privatized Graduate PLUS market, which could lead to approximately $1.4 billion in new loan originations starting in July 2026 [6]. Financial Projections - This market capture could result in roughly $70 million in origination fees and $200 million in interest income, representing about a 6% boost to Bank of America's 2027 revenue outlook [7]. Independent Financial Trajectory - SoFi's CFO projects over $3 billion in adjusted net revenue by 2025, with annual revenue growth exceeding 25% through 2026, alongside plans to re-enable members to trade popular digital currencies later this year [8]. Analyst Outlook - Bank of America analysts express confidence in SoFi's positioning and strategy, suggesting the company could become a significant player in the fintech space, akin to American Express, while maintaining a Neutral rating with a price forecast of $16 [9].