SoFi sues to end pause on federal student loan payments

The Biden administration is trying to halt the pause on federal student loan payments.

The private bank believes that the moratorium has no legal basis and has cost the bank.

Student loan payments were halted for the first time under President Trump's administration and the hold has been extended eight times over the last three years.

We have supported and continue to support targeted student loan forgiveness, as well as the student loan payment moratorium during the economic crisis during the peak of the COVID 19 epidemic. A company spokeswoman told FOX Business Digital that it was time for the administration to follow through on its word to end the federal student loan payment moratorium.

The latest extension from the Biden administration, which could stretch as far as this summer, is unlawful on multiple grounds, according to the Utah-based bank's lawsuit. In addition, it said that its federal student loan refinancing business has suffered because borrowers are not encouraged to refinance while payments and interest are still on hold.

The bank argues that the latest extension was only enacted to aid borrowers in the throes of the COVID 19 epidemic because of legal challenges to Biden's plan for widespread student debt forgiveness.

The lawsuit said that the extension was not a valid reason authorized by the HEROES Act and that the extension did not violate the Administrative Procedure Act.

The Secretary of State said that this extension was an illegal overreach of power in violation of the Administrative Procedure Act and Congress did not authorize the extension of the payment pause. Americans shouldn't have to carry this burden at the cost of $5 B per month. It is time that the administration upholds its word to end the moratorium, or at a minimum, to put those who are not eligible for forgiveness back into repayment. SoFi said the bank's recent extension has cost $6 million so far, with a potential total of $30 million in losses if it continues through August.

The Department of Education has defended the legality of the pause.

It called the lawsuit an attempt by a multi-billion dollar company to make money while they force 45 million borrowers back into repayment. The department will continue to fight to give relief to borrowers, provide a smooth path to repayment and protect borrowers from industry and special interests, the agency said.