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Thu Mar 16, 2023, 09:46 PM

3 fast facts about SoFi, the company looking to end the student loan payment pause


Capitalism always knows how to ruin a good time, especially when it comes to student loan debt. With student loan payment pauses lifting the financial burden off millions of federal borrowers since March 2020, private student-loan refinancing companies like SoFi are tired of payment purgatory and are ready to start collecting on their loans. Last Friday, SoFi filed a lawsuit against the U.S. Department of Education to end the latest payment pause extension, arguing Biden’s recent pause is “an illegal overreach of power.”

“We have supported and continue to support targeted student loan forgiveness, in addition to the student loan payment moratorium during the economic crisis at the height of the COVID-19 pandemic. However, it’s time for the administration to follow through on its word to end the federal student loan payment moratorium,” SoFi told the Washington Post.

In November 2022, after Biden’s plan to cancel $10,000 to $20,000 in student loan debt for federal borrowers was put on hold by the Supreme Court, the president extended the payment pause to ensure that borrowers did not have to start paying off their debt without a decision by SCOTUS on relief. Even Education Secretary Miguel Cardona noted that the extension intended to alleviate “financial uncertainty” for borrowers. The payment pause is set to end 60 days after June 30, or 60 days after SCOTUS makes a decision about the forgiveness plan, whichever happens first. But SoFi argues that the recent payment pause violates the 2003 Higher Education Relief Opportunities for Students Act, an authority the Department of Education has to suspend payments.

Read more: Student loan borrowers could be forced into ‘unthinkable financial decisions’

But according to the Heroes Act, the current education secretary is permitted “to alleviate the hardship that federal student loan recipients may suffer as a result of national emergencies.” “This lawsuit is an attempt by a multibillion-dollar company to make money while they force 45 million borrowers back into repayment — putting many at serious risk of financial harm,” said a Department of Education spokesperson. SoFi has made billions off of borrowers owing student loan debt, and while we don’t know if they’ll win this fight – here’s what we do know about the multi-billion-dollar company;


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