A nonprofit research and education organization has asked a federal court to restart student loan payments that have been put on pause since the COVID-19 pandemic hit, saying the payment hiatus is hurting its recruiting and retaining employees.
In a lawsuit filed last month, Mackinac Center for Public Policy asked a federal court to stop the Department of Education’s ongoing pause of student loan payments. The group this week asked for an injunction to lift the pause while the litigation proceeds.
The Mackinac Center, a Michigan-based conservative think tank focused on free markets and limited government, said it benefits from the Public Service Loan Forgiveness program that allows a portion of student loans forgiven when employed at qualifying workplaces such as nonprofits.
The ongoing pause has cost U.S. taxpayers $5 billion each month and diminished incentives for borrowers to work at nonprofit organizations, the group argues in the lawsuit filed in the U.S. District Court for the Eastern District of Michigan.
When the pandemic hit the U.S. in March of 2020, the Trump administration paused student loan payments for six months. The federal government has repeatedly extended the pause, citing the economic hardships of borrowers.
“This unlawful ongoing student-loan payment pause fits a familiar pattern that already played out in the context of the federal eviction moratorium. First, Congress enacts a temporary economic-relief program, then an administrative agency extends that program indefinitely, and finally, courts step in to halt the unlawful scheme,” said Shen Li, a lawyer for the New Civil Liberties Alliance, representing the Mackinac Center.
Other programs, like a moratorium on evictions, were halted by the courts. Other programs are still in limbo.
The Supreme Court recently heard arguments in a case challenging President Biden’s plan to forgive a certain amount of debt per student loan borrower, which was based on the economic hardship caused by COVID-19.
The justices are expected to issue a ruling on the legality of the president’s plan by the end of June. Lower courts had halted the forgiveness.
The Mackinac Center isn’t the only group challenging the payment pause. SoFi Bank also wants the pause to come to an end, arguing in federal court that it cost millions of dollars in profits.
