![]() The Department of Education’s response to SoFi lawsuit SoFi’s lawsuit also claims that the latest extension violates the Administrative Procedure Act, which specifies that administrative agencies must allow time for public comment and feedback before implementing a regulatory change. is still under a state of emergency due to the ongoing pandemic, it is set to be lifted in May. The HEROES Act gives the Secretary of Education the authority to modify student loan programs to protect borrowers during a national emergency. SoFi’s lawsuit also argues that the Biden administration does not have the grounds to use the HEROES Act to justify its most recent payment pause. It also claims that the company could see a total loss of $30 million if the payment pause were to extend through August. SoFi argues that Biden’s eighth and most recent extension of the payment pause has cost them $6 million to $8 million in profit losses. The lawsuit filed last week outlines this concern, saying “In essence, SoFi is being forced to compete with loans with 0% interest rates and for which any ongoing repayment of the principal is entirely optional.” Since federal student loan payments and interest have been on hold for nearly three years, borrowers do not have much incentive to refinance their loans with a private lender. SoFi’s primary argument is that the ongoing payment pause has caused damage to its federal student loan refinancing business. ![]() SoFi’s case against the ongoing student loan payment pause President Biden has extended the pause several times since he took office, most recently extending it until 60 days after June 30 or 60 days after the Supreme Court issues a decision on student debt relief, whichever is sooner. Student loan payments were originally paused at the start of the COVID-19 pandemic, in March of 2020. ![]() March 3, 2023, arguing that the ongoing payment pause is hurting its student loan refinancing business. SoFi filed the lawsuit with a federal judge in Washington, D.C. SoFi, one of the largest private student loan lenders in the U.S., has sued the Biden administration over the latest extension of the student loan payment pause. ![]()
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