Activists and students protest in front of the Supreme Court during a rally for student debt cancellation in Washington, DC, on February 28, 2023.
ANDREW CABALLERO-REYNOLDS/AFP via Getty Images
Student-loan lender SoFi filed a lawsuit to end the student-loan payment pause.
But with the pause set to expire this summer, an expert said the lawsuit might not even matter.
Still, it could place constraints on any additional debt relief Biden would implement down the road.
Student-loan borrowers hoping for Biden’s debt relief have been hit from all sides in the past few months.
Late last month, the Supreme Court heard oral arguments in the two conservative-backed lawsuits that blocked President Joe Biden’s plan to cancel up to $20,000 in student debt for borrowers making under $125,000 a year. Since November, the implementation of that debt relief has been paused due to those lawsuits. Now, borrowers have a few months of limbo until the Court issues a final decision on the legality of Biden’s plan by June.
Just when borrowers might have thought those were the only lawsuits they had to deal with, a student-loan lender stepped in. Last week, SoFi Bank — a student-loan refinancing company — filed a lawsuit against the Education Department. It’s asking the court to end Biden’s latest extension of the student-loan payment pause, and at the very least, return borrowers ineligible for Biden’s broad debt relief back into repayment.
After his relief’s implementation was put on hold, Biden extended the student-loan payment pause. It’s currently set to end 60 days after June 30, or 60 days after the lawsuits are resolved, whichever happens first, and the intent was to ensure that borrowers did not have to start paying off their debt without a decision on relief. SoFi wrote in its complaint that Biden did not follow proper procedure with his latest extension of the payment pause, and they also cited revenue loss to their refinancing business.
Dalié Jiménez, a law professor at University of California Irvine and director of the Student Loan Law Initiative, told Insider she was “surprised” with the timing of the lawsuit, and how it might not even make it through the courts before payments are scheduled to resume anyway.
“I’m more surprised about the timing than anything. I’m not surprised that they’re making this argument,” Jiménez said. “They might not win because it might not matter since the pause would just be over. In a …read more
Source:: Business Insider