Warren, Pressley Blast SoFi for Bank’s Shameless Lawsuit to Repeal Student Loan Payment Pause
Student Loan Payment Pause Provides Essential Relief to 43 Million Borrowers Due Student Debt Cancellation
“SoFi’s attempt to end the student loan payment pause and force millions of Americans into repayment while raking in massive revenues and handing out huge executive paychecks represents corporate greed at its worst.”
Washington, D.C. – U.S. Senator Elizabeth Warren (D-Mass.) and Congresswoman Ayanna Pressley (MA-07) sent a letter to the CEO of SoFi Technologies and SoFi Lending Corp, calling on the company to answer for its lawsuits attempting to end the student loan payment pause and force borrowers back into repayment, which would put tens of millions of people in crisis.
“Your company’s attempt to use the courts to enact a backdoor repeal of this payment pause – at the same time the Supreme Court debates whether it will halt President Biden’s student debt cancellation plan, and while touting your values as a company that will ‘do the right thing,’ – is unconscionable and you owe your customers, and the American public, an explanation for these actions,” wrote Senator Warren and Congresswoman Pressley.
While SoFi is telling courts that it is suffering “significant, irreparable harm” during the payment pause, it is telling its shareholders a different story. The company’s CEO said “SoFi is going to be fine either way. ... We achieved over a billion dollars of revenue in all of 2021.” SoFi’s CEO made nearly $103 million in 2021, and its four other highest-paid executives made over $70 million combined.
As of December 2021, 43 million Americans had student loans, and about 20 percent of those borrowers were in default. The Department of Education (ED) projected that the number of delinquencies and defaults would skyrocket if student loan payments were restarted without additional loan relief. The lawmakers note that the impacts of student loan debt burden disproportionately fall on low-income communities: an analysis of the applications for President Biden’s student loan debt cancellation program found that “more than 98 percent of applications came from ZIP codes where the average income is under $75,000” and “(a)bout two-thirds were from neighborhoods with an average income below $40,000.” Additionally, more applications per capita came from communities of color than from majority-white communities, and studies have shown that student loan debt disproportionately impacts Black and Latinx borrowers.
“SoFi’s lawsuit against ED is a dangerous and cynical ploy to prevent millions of borrowers from obtaining relief. It not only contradicts its stated values, but threatens your own customers and millions of other Americans,” concluded the lawmakers.
Given these concerns about SoFi’s lawsuit and the impact it could have on student loan borrowers, Senator Warren and Congresswoman Pressley are calling on SoFi to answer a set of questions about its expected profits if student loan payments are reinstated, compensation for top executives, and details about the federal loan borrowers it works with by April 18, 2023.
Senator Warren is leading the fight to hold loan servicers and for-profit colleges accountable to fix the broken student loan system:
- In March 2023, Senator Warren sent a letter to Secretary of Education Miguel Cardona seeking further administrative action from ED to promote accountability among institutions of higher education.
- In February 2023, Senator Warren released a new report based on her investigation into how efforts by Republican officials and special interests to block the President’s plan to cancel up to $20,000 in federal student loan debt would affect Americans.
- In October 2022, Senator Warren and Representative Pressley visited communities across Massachusetts to celebrate the Biden administration’s student debt cancellation plan and help residents sign up for student loan relief.
- In October 2022, Senator Warren called on the Department of Education to hold for-profit colleges executives accountable for scamming students out of a quality education and loading them up with student debt.
- In September 2022, Senator Warren and Representative Pressley sent a letter to federal student loan servicers to inquire about the steps they are taking to ensure borrowers are receiving timely information about President Biden’s debt cancellation plan.
- In September 2022, Senator Warren sent a letter to the Department of Justice (DOJ) urging DOJ to issue and implement updated student debt bankruptcy guidance without delay following the Biden-Harris administration’s historic decision to cancel up to $20,000 in student debt for up to 43 million borrowers and overhaul the student loan system.
- In August 2022, Senator Warren recognized the Department of Education for protecting students and taxpayers by taking action to revoke ACICS status as an accreditor.
- In March 2022, Senator Warren, along with Senate Democratic Whip Dick Durbin (D-Ill.), Senator Sherrod Brown (D-Ohio), and U.S. Representatives Pramila Jaypal (D-Wash.) and Mark Takano (D-Calif.), urged Secretary of Education Miguel Cardona, urging the Department of Education (ED) to swiftly discharge the loans of borrowers defrauded by predatory for-profit colleges and universities, including those operated by Corinthian College.
- Senator Warren, along with Senate Majority Leader Charles E. Schumer (D-N.Y.) and Representatives Jayapal, Pressley, Ilhan Omar (D-Minn.), and Katie Porter (D-Calif.) led more than 80 colleagues in a bicameral letter to the Department of Education calling for it to release the memo outlining the Biden administration’s legal authority to cancel federal student loan debt and immediately cancel up to $50,000 of debt for Federal student loan borrowers.
- Senator Warren, along with Senate Majority Leader Schumer and Representative Pressley released new analysis showing that resuming student loan payments would strip $85 billion every year from the economy.
- Senator Warren, along with Senators Chris Van Hollen (D-Md.), Blumenthal (D-Conn.), and Smith (D-Minn.), sent letters to four federal loan servicers, requesting information on their plans to support borrowers when student loan payments resume.
- Senator Warren, along with Senators Brown, Blumenthal, Smith, and Van Hollen sent a letter to Maximus, the company that is assuming Navient’s federal student loans servicing contract, questioning its troubling history and seeking assurances that borrowers will receive appropriate services and protections during the transition.
- Senator Warren, along with Senators Brown, Blumenthal, Smith, Van Hollen, Cory Booker (D-N.J.), Bernie Sanders (I-Vt.), Tammy Baldwin (D-Wis.), and Edward J. Markey (D-Mass.) sent a letter to the Department of Education urging Secretary Cardona to use his authority to automatically remove all student loan borrowers in default.
- In November 2021, Senator Warren, along with Senators Van Hollen, Blumenthal, Brown, Smith, Markey, and Robert Menendez (D- N.J.) sent letters to the heads of Pennsylvania Higher Education Assistance Agency, Granite State, and Navient calling on them to correct past errors with borrowers’ accounts and address growing concerns over their preparedness to transfer millions of borrowers to new servicers.
- In October 2021, Senator Warren, along with Senator Markey and Representative Pressley, released a report that detailed the ongoing failures of the Public Service Loan Forgiveness program for public servants in Massachusetts.
- At a hearing in July 2021, Senator Warren pushed for borrower protections after a major student loan servicing shakeup.
- In July 2021, Senator Warren released a statement regarding the end of the Pennsylvania Higher Education Assistance Agency's (PHEAA) contract servicing student loans with the Department of Education.
- On June 24, 2021, Senators Warren and John Kennedy (R-La.) called on PHEAA CEO to address concerns about false and misleading statements made during a subcommittee hearing on student loans, which was chaired by Senator Warren.
- In May 2021, Senator Warren led her colleagues in sending a letter requesting information about the steps the Department of Education and the Office of Federal Student Aid (FSA) are taking to help transition millions of federal student loan borrowers back into repayment ahead of the scheduled end to the pause on student loan payments and interest in September.
- In April 2021, Senators Warren and Raphael Warnock (D-Ga.) led a group of colleagues in a letter to Education Secretary Miguel Cardona urging the Department of Education to take swift action to automatically remove all federally-held student loan borrowers from default.
- That same month at her first hearing as chair of the Senate Banking, Housing, and Urban Affairs Committee's Subcommittee on Economic Policy, Senator Warren called out PHEAA for its mismanagement of the Public Student Loan Forgiveness Program.
- Senator Warren also questioned Jack Remondi, CEO of Navient, on the company's long history of abusive and misleading behavior towards borrowers and their profiting off the broken student loan system.
- In March 2021, Senators Warren and Menendez applauded the passage of their Student Loan Tax Relief Act as part of the American Rescue Plan.
- Last Congress, Senator Warren introduced the Consumer Bankruptcy Reform Act and in 2019, co-led the Student Borrower Bankruptcy Relief Act with Senator Durbin (D-Ill.) to make student loans dischargeable through bankruptcy.
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