Bernie Sanders brings the fight against student loans to this public company
Part of student loan debt for millions of Americans set to be forgiven with executive action from President Joe Biden Wednesday. A US senator speaks out in support of Biden’s announcement and takes aim at a public company that is a big player in the student loan business.
What happened: Biden is expected to announce the cancellation of some federal student loan debt, a move that has been rumored for months.
The decision could divide the country, with many Americans already paying off some or all of their student loan debt.
Potential political and legal challenges to Biden’s announcement could follow, according to the Wall Street Journal.
Biden’s announcement could also see an extension of a pause on student loan repayments until the end of the year, extending the relief which is due to expire on August 31, 2022.
Several companies are big players in the field of student loan repayments, including Sofi Technologies SOFI. The company has now found itself the target of US senator. Bernie Sanders, an independent from Vermont.
“If SoFi, a student loan refinance company, could give its CEO a 92% raise last year by paying him a grand total of $103 million in compensation and spend $625 million putting his name on the LA Rams football stadium, you know what President Biden can do? Cancel all student debt,” Sanders tweeted.
Related Link: SoFi Q2 Earnings Highlights: Revenue and EPS Beaten, Record Revenues and 450,000 New Members Drive Full-Year Forecast Increase
Why it matters: Sanders has been a supporter of eliminating student debt for many years, and his comments come as no surprise.
Sanders has been a U.S. senator since 2007 and has spent decades of his life in politics, including running for president of the United States as a Democratic candidate in 2016 and 2020 and finishing in second place before giving in to hillary clinton and Biden, respectively.
The student loan business forms part of SoFi’s lending products, which also include home loans and personal loans. The impact of Biden’s student loan cancellation could impact the company’s revenue and profits for many years to come.
SoFi reported record second-quarter revenue and raised its full-year guidance. The company will be one of many to be analyzed on the impact of Biden’s announcement and the financial impact it could have.
Sanders comments could pressure company for spending control, with documents showing CEO Antoine Noto was rewarded in 2021 with an increase in his remuneration.
Noto received a base salary of $850,000 in 2021, an increase of 41.7% over his 2020 salary. The CEO also received $892,500 in bonus in 2021 and equity awards of one worth $101.2 million, bringing his total compensation in 2021 to $103 million from $53.5 million in 2020.
SoFi is now the latest company to be targeted by Sanders on Twitter in public, joining a list that includes Chipotle Mexican Grill GCM, Amazon.com Inc. AMZN and Tesla Inc. TSLA CEO Elon Musk.
“You won’t hear about it in the corporate media, but that’s what a rigged economy is. Three people now own more wealth than the bottom half of American society. 45% of all new income goes to the top 1%. CEOs are paid 350 times more than their average worker. Absurd”, Sanders tweeted.
SOFI Price Action: SoFi shares rose 7.13% to $6.61 on Wednesday from a 52-week range of $4.82 to $16.47.
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