SoFi has been an open critic of the payment pause, and instead advocated for Biden’s forgiveness plan, which wouldn’t affect any loans the company originated. Those who graduate college with student loans owe close to $30,000 on average, according to the most recent data from the Institute for College Access & Success. In this June 20, 2019, photo a student works in the library at Virginia Commonwealth University in Richmond, Va. “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.” “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,” an Education Department spokesperson told Yahoo Finance. The Education Department asserts the legality of the payment pause and also questioned the motives of the lawsuit. Both administrations used the HEROES Act, which empowers the Education Secretary to waive or modify laws or regulations concerning federal student loan programs during a military operation or national emergency. The pause on federal student loan payments was enacted under the Trump administration in the spring of 2020 and was extended multiple times under Biden, most recently in December after the president’s loan forgiveness plan got hung up in two lawsuits that are now before the Supreme Court. This latest extension is an illegal overreach of power.” ![]() ![]() “However, it’s time for the Administration to follow through on its word to end the federal student loan payment moratorium. “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,” the company said in a statement to Yahoo Finance. “Those numbers also significantly understate the Moratorium’s harmful effects, because they do not take into account the growth that SoFi’s federal student-debt refinancing business would otherwise have experienced,” the lawsuit states.
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