In full transparency, the following is a media release from Sen. Elizabeth Warren’s office. She was elected by voters in the Commonwealth of Massachusetts to serve the state in Washington DC in the US Senate. She is a Democrat. (stock photo). SOURCE publishes press release from elected leaders as a community service.
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WASHINGTON DC – 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.
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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.”
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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.
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