Private Student Loan Lender Sues to Restart Payments
Katherine Knott
March 7, 2023
SoFi Bank, a private student loan lender, says it has lost $300 to $400 million in total revenues because of the three-year pause on federal student loan payments, and it wants that pause to end.
In a lawsuit filed in the federal district court for the District of Columbia, the bank argues that the latest extension of the pause violated federal law, and that a federal judge should order, at minimum, the Education Department to restart payments for those who are not eligible for student loan forgiveness.
SoFi Bank CEO Anthony Noto has criticized the pause and broad-based debt relief.
The administration extended the pause for an eighth time in order to allow time for litigation challenging the one-time debt-relief plan to be resolved. The lawsuit argues that exceeds the authority of the Higher Education Relief Opportunities for Students Act of 2003, which has been used by both the Trump and Biden administration to pause payments.
