A private bank is trying to force the Biden administration to end its pause on federal student loan payments, arguing that the moratorium has no legal basis and has cost the bank millions of dollars in profits.
“The eighth extension does not even attempt to redress harm from the pandemic at all, but rather to alleviate ‘uncertainty’ caused by the debt-cancellation litigation,” SoFi says in the lawsuit.
The most recent extension has cost the bank at least $6 million in lost profits, SoFi says, and it could lead to a total of $30 million in losses if it continues through August. The Education Department defended the legality of the pause, calling the lawsuit “an attempt by a multi-billion dollar company to make money while they force 45 million borrowers back into repayment.”
The lawsuit drew swift condemnation from borrower advocates, who called it a money grab at the expense of“The real story here is the huge risk this poses to tens of millions of working people who SoFi would never lend to — families across the country that depend on the student loan payment pause to shield them from financial devastation,” said Mike Pierce, executive director of the Student Borrower Protection Center.
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