Civil rights and advocacy group says Biden’s proposal ‘not only constitutional, but a desperately needed first step’
(WASHINGTON, D.C., 2/28/23) – The Council on American-Islamic Relations (CAIR), the nation’s largest Muslim civil rights and advocacy organization, today reiterated its support for the constitutionality of the Biden administration’s student loan forgiveness plan, saying, “It’s not only constitutional, but a desperately needed first step.”
SEE: Student loan forgiveness before Supreme Court: What you need to know
In August 2022, President Biden announced the limited student loan relief for Americans that earn less than $125,000 a year or families earning less than $250,000. The Biden administration’s student loan debt forgiveness plan forgives $10,000 in student loans for all who qualify, or $20,000 for qualifying Pell grant recipients. Several states have challenged this program in a federal lawsuit.
In a statement, CAIR National Deputy Director Edward Ahmed Mitchell said:
“President Biden has the legal authority to provide federal student loan debt relief, and his proposal is a legitimate exercise of that authority. It’s not only constitutional, but a desperately needed first step to alleviate the financial burden that interest-based loans have created for millions of Americans.
“The Supreme Court should uphold the constitutionality of President Biden’s proposal, and President Biden should go even further by implementing a comprehensive loan forgiveness program that waives all interest on existing and future federal student loan payments and canceling at least $50,000 for all borrowers. Interest-based student loans create an immoral and destructive cycle of debt that harms millions of Americans.”
BACKGROUND:
Last July, the Biden administration also announced a Department of Education plan that would eliminate interest capitalization when a borrower enters repayment, exits forbearance, leaves an income-driven repayment plan (IDR), or defaults on a loan. Interest capitalization occurs when unpaid interest is added to the principal amount of a loan, making the principal balance higher.
That proposed rule stated that while interest capitalization will be eliminated in certain instances, it will continue to be permitted in other instances in accordance with the Higher Education Act.
CAIR believes that President Biden’s limited student debt cancelation and interest waiver plans do not go far enough and primarily benefits middle-class American households that typically have less student debt and will not impact the growing racial wealth gap in the United States.
According to the Urban Institute, African American households (42%) are burdened by more student loan debt and have less accumulated wealth than White households (34%) holding student debt.
In February 2022, a coalition of Muslim organizations called on President Biden to establish interest-free student loans and cancel a significant amount of existing student debt. In April, that coalition renewed its call following the extension of the moratorium on student loan payments.
- Forgiving loans for all borrowers whose past payments have already exceeded the principal amount of their original loan.
- Canceling at least $50,000 in student debt for all remaining borrowers.
- Waiving interest payments on all current and future loans.
- Extending the freeze on student loan payments until at least January 1, 2023.
Nearly one-third of all American students go into debt to pay for their college and Americans collectively owe nearly $1.6 trillion in student loan debt. That number is projected to grow to $2 trillion by 2024 and $3 trillion by 2038.
CAIR’s mission is to protect civil rights, enhance understanding of Islam, promote justice, and empower American Muslims.
La misión de CAIR es proteger las libertades civiles, mejorar la comprensión del Islam, promover la justicia, y empoderar a los musulmanes en los Estados Unidos.
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For more information, email: [email protected], CC [email protected]
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CONTACT: CAIR National Deputy Director Edward Ahmed Mitchell, 404-285-9530, [email protected]; CAIR Government Affairs Director Robert McCaw, 202-742-6448, [email protected]; CAIR National Communications Director Ibrahim Hooper, 202-744-7726, [email protected]; CAIR National Communications Coordinator Ismail Allison, 202-770-6280, [email protected]