Capitalism always knows how to ruin a good time, especially when it comes to student loan debt.

With student loan payment pauses lifting the financial burden off millions of federal borrowers since March 2020, private student-loan refinancing companies like SoFi are tired of payment purgatory and are ready to start collecting on their loans.

Last Friday, SoFi filed a lawsuit against the U.S. Department of Education to end the latest payment pause extension, arguing Biden’s recent pause is “an illegal overreach of power.”

“We have supported and continue to support targeted student loan forgiveness, in addition to the student loan payment moratorium during the economic crisis at the height of the COVID-19 pandemic. However, it’s time for the administration to follow through on its word to end the federal student loan payment moratorium,” SoFi told the Washington Post.

In November 2022, after Biden’s plan to cancel $10,000 to $20,000 in student loan debt for federal borrowers was put on hold by the Supreme Court, the president extended the payment pause to ensure that borrowers did not have to start paying off their debt without a decision by SCOTUS on relief.

Even Education Secretary Miguel Cardona noted that the extension intended to alleviate “financial uncertainty” for borrowers.

The payment pause is set to end 60 days after June 30, or 60 days after SCOTUS makes a decision about the forgiveness plan, whichever happens first. But SoFi argues that the recent payment pause violates the 2003 Higher Education Relief Opportunities for Students Act, an authority the Department of Education has to suspend payments.

But according to the Heroes Act, the current education secretary is permitted “to alleviate the hardship that federal student loan recipients may suffer as a result of national emergencies.”

“This lawsuit is an attempt by a multibillion-dollar company to make money while they force 45 million borrowers back into repayment — putting many at serious risk of financial harm,” said a Department of Education spokesperson.

SoFi has made billions off of borrowers owing student loan debt, and while we don’t know if they’ll win this fight – here’s what we do know about the multi-billion-dollar company.

Its lawsuit timing is distasteful

Currently, student loan debt is a hot topic and the cancellation of its payments is constantly being called into question.

More than three weeks ago when SCOTUS heard the two cases brought by six Republican-led states and another brought by two borrowers in Texas against Biden’s student loan forgiveness plan, borrowers assumed those were the only lawsuits leaving them in limbo about relief for their student loan debt, but since SoFi’s lawsuits that reality has changed.

With the gravity of Biden’s plan, SCOTUS fast-tracked the hearings with the expectation that a decision will be made by June 2023.

While the Department of Education has 21 days to file a response to SoFi, according to experts like Dalié Jiménez, a law professor at the University of California – it is likely that SCOTUS won’t fast-track their case and that the courts will wait it out.

“I’m more surprised about the timing than anything. I’m not surprised that they’re making this argument,” Jiménez told Insider. “They might not win because it might not matter since the pause would just be over. In a normal moving lawsuit situation, that’s probably what would happen.”

The more you owe, the more profit they make

When student loan borrowers seek private loans from lenders like SoFi, they need additional funds to cover their education or they’re looking for better interest rates.

Regardless of their reasoning, that creates competition between private lenders and the federal government.

With the federal government holding 93% of the $1.7 trillion in outstanding student debt, SoFi and many other private lenders have taken financial hits while being unable to collect on their loans and the interest rates of their loans.

Since Biden’s eighth extension of the payment pause in November 2022, SoFi has reported losing $6 million to $8 million in profit.

Overall the company claims they could see a total loss of $30 million if the payment pause were to extend through August 2023.

The lawsuit can rush borrowers back to payments they can’t make

The lawsuit by SoFi requests an end to the payment pause for all borrowers or the bare minimum of ending the pause for borrowers who are not eligible for Biden’s student loan forgiveness plan.

Regardless of when the pause ends, the Department of Education has already predicted historically high default and delinquency rates if the forgiveness plan is struck down by SCOTUS, but ending the payment pause earlier than anticipated would likely contribute to that problem.

“Rushing borrowers back before they’re ready and before the Department of Education is ready is going to cause a lot of chaos and harm to borrowers,” Jonathan Fansmith of the American Council on Education told Marketplace.