Sen. Elizabeth Warren (D-Mass.) and Rep. Ayanna Pressley (D-Mass.) on Wednesday sent a letter to Anthony Noto, CEO of SoFi, asking several questions about why the student loan refinancing company sued the Department of Education (ED) to end the student loan payment pause.
In March, SoFi sued ED to immediately end the ongoing freeze on federal student loan payments and interest accrual — or at minimum, to end it for borrowers who are not eligible for President Joe Biden’s student loan debt cancellation plan. The company argued that ED’s latest extension of the student loan payment pause was unlawful and does not “attempt to redress harm from the pandemic at all, but rather to alleviate ‘uncertainty’ caused by the debt-cancellation litigation.”
“The moratorium applies to all borrowers, even those who do not qualify for student-debt cancellation; thus, millions of borrowers who are not subject to any litigation ‘uncertainty’ are nevertheless being relieved of the obligation to repay their loans,” SoFi’s lawsuit stated.
In their letter on Wednesday, Warren and Pressley wrote that SoFi’s attempt to repeal the payment pause is “unconscionable” and SoFi owes their customers and the public “an explanation for these actions.” Warren and Pressley noted that while SoFi in its lawsuit stated that the company is suffering “significant, irreparable harm” during the payment pause, Noto wrote in a blog post more than one year ago that SoFi “is going to be fine either way.”
“Indeed, your company has thrived during the pandemic payment pause, and you have been richly rewarded,” the lawmakers wrote. “You were paid a whopping nearly $103 million in 2021, and your company’s four other highest-paid executives made over $70 million combined. 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.”
Warren and Pressley added that this instance is not the first time SoFi has tried to undermine federal student loan debt relief, noting that in Noto’s March 2022 blog post, SoFi called on ED to end the payment pause. Additionally, after Biden announced his student loan debt cancellation plan in August 2022, SoFi sent out an email urging borrowers to refinance their student loans to “save before rates rise.”
The lawmakers asked Noto to answer several questions by April 18, 2023, including how much in additional earnings and profit SoFi will make in 2023 if its case is successful, what Noto’s estimated 2023 compensation is, and how SoFi will help borrowers who are unable to pay their student loans, among other questions.
“SoFi’s lawsuit against ED is a dangerous and cynical ploy to prevent millions of borrowers from obtaining relief,” the lawmakers wrote. “It not only contradicts its stated values, but threatens your own customers and millions of other Americans.”
SoFi did not respond to a request for comment from NASFAA.
Publication Date: 4/7/2023