SoFi sues to block Biden pause on student loans

The bank SoFi is suing to end the Biden administration’s pandemic-era pause on federal student loan payments, claiming it is an overreach of power.

SoFi, a personal finance company that sells products for student loan refinancing, filed a suit in the U.S. District Court in the District of Columbia on Friday aimed at ending the freeze, USA Today reported.

President Biden in November extended the federal pause on student loan payments and interest accrual, which was first enacted by then-President Trump at the beginning of the coronavirus pandemic. Biden said last year that the freeze was extended until beyond June while his administration faces legal challenges to its own debt forgiveness plan.

In the SoFi filing, the company argues that the administration’s pause extension was to “alleviate ‘uncertainty’ for borrowers during the pendency of ongoing litigation regarding the debt-cancellation program,” as opposed to help borrowers impacted by the COVID-19 pandemic.

The freeze has been extended eight times since it was put in place by Trump in March 2020.

The SoFi lawsuit comes as federal student loan borrowers are left in limbo over the exact date they will have to begin repayments. The Supreme Court heard oral arguments last week on two cases contesting Biden’s forgiveness plan that could give up to $20,000 of relief to millions of Americans.

Biden said last week that he’s not confident that the Supreme Court will clear his plan, but the White House has avoided outlining any kind of Plan B.

“Right now, the plan that we have before the Supreme Court is the plan that we have for the American people,” press secretary Karine Jean-Pierre said on Monday. “We believe that again, we have the legal authority, that the other side does not, it does not have the standing or the merit to really move forward with what they’re trying to do.”

Tags Joe Biden Karine Jean-Pierre

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