President Joe Biden.

Student-loan lender SoFi asked a federal court to end the student-loan payment pause.
It cited direct harm to its refinancing business in the form of revenue loss.
The Education Department said the pause is legal, and the lawsuit puts borrowers “at serious risk of financial harm.”

President Joe Biden’s Education Department has put a major student-loan lender on blast.

On Friday, SoFi Bank and SoFi Lending Corp. — a student-loan refinancing company — sued the Education Department and asked the District Court for the District of Columbia to end Biden’s latest extension of the student-loan payment pause.

At the very least, SoFi wrote, borrowers who do not qualify for the president’s broad debt relief plan should be required to reenter repayment.

In November, Biden extended the student-loan payment pause through 60 days after June 30, or 60 days after the Supreme Court issues a decision on the lawsuits that paused the president’s plan to cancel up to $20,000 in student debt for federal borrowers, whichever happens first. SoFi wrote in its complaint that the extension was “unlawful on multiple grounds,” citing direct harm to its refinancing business.

But the Education Department on Monday night pushed back on those claims.

“The payment pause is legal, as is our plan to provide one-time debt relief to tens of millions of borrowers most at risk of delinquency and default when they return to repayment,” a department spokesperson told Insider.

“This lawsuit is an attempt by a multi-billion dollar company to make money while they force 45 million borrowers back into repayment – putting many at serious risk of financial harm,” the spokesperson said. “The Department will continue to fight to deliver relief to borrowers, provide a smooth path to repayment, and protect borrowers from industry and special interests.”

The Supreme Court concluded oral arguments in the cases that paused Biden’s broad debt relief last week. The White House has not yet commented on whether it will consider additional relief, such as a further payment pause extension if its relief gets struck down.

But as SoFi said in its complaint, Biden does not have the authority to continue extending the pause as part of pandemic relief using the HEROES Act of 2003, which gives the Education Secretary the ability to waive or modify student-loan balances in connection with a national emergency, like COVID-19.

“The HEROES Act provides limited authority to relieve transitory burdens for federal student borrowers who …read more

Source:: Business Insider


A major student-loan lender is putting millions of borrowers ‘at serious risk of financial harm’ by filing a lawsuit to end the payment pause, Biden’s Education Department says

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