(WASHINGTON, DC – 4/8/2024) The Council on American-Islamic Relations (CAIR), the nation’s largest Muslim civil rights and advocacy organization, today welcomed the Biden administration’s proposal to deliver additional student debt relief by cancelling up to $20,000 of accrued unpaid interest but called on the administration to go further by waiving all interest payments and proposing the establishment of interest-free, principle only student loans.
CAIR also noted that proposals to expand student debt relief will not pacify or satisfy young Americans who strongly and overwhelmingly oppose the Biden administration’s support for the genocide in Gaza.
In a statement, CAIR National Deputy Director Edward Mitchell said:
“We support the Biden administration’s proposals to reduce the burden of student loan debt crisis. However, the administration must understand that promises of additional student debt relief, which the Supreme Court may or may not approve, will not satisfy or pacify America’s young people, who strongly and overwhelmingly oppose the Biden administration’s support for Israel’s genocide in Gaza.
Furthermore, the administration must still address the root of this crisis: runaway interest payments on student debt. Instead of only cancelling a small amount of unpaid interest, the Biden administration should cancel all interest payments on existing debt and propose the creation of interest-free, principle-only student loans as the American Muslim community proposed in 2020. Waiving interest payments will not only help Americans escape the cycle of runaway debt but also accommodate Muslim students and others whose religious beliefs forbid them from engaging in usurious transactions.
“We urge the Biden Administration and Congress to boldly address all of the concerns of young Americans, here and abroad.”
According to the proposed plan:
“More than 25 million borrowers owe more than they originally borrowed, including many who have made years of payments, due to the interest rates on Federal student loans. President Biden will announce plans that, if finalized as proposed, would cancel up to $20,000 of the amount a borrower’s balance has grown due to unpaid interest on their loans after entering repayment, regardless of their income. Low and middle-income borrowers enrolled in the SAVE plan or any other income-driven repayment (IDR) plan would be eligible for the entire amount their balance has grown since entering repayment to be canceled under the Administration’s plans. This group of borrowers includes single borrowers who earn $120,000 or less and married borrowers who earn $240,000 or less. No application will be needed for borrowers to receive this relief if the plan is implemented as proposed.”
Last June, CAIR expressed disagreement with the U.S. Supreme Court ruling on the constitutionality of the Biden administration’s student loan forgiveness plan and renewed its call for the government to address the student debt crisis by establishing interest-free student loans.
In 2022, CAIR joined other local and national Muslim organizations in welcoming the White House’s then extension of the moratorium on student loan repayments, again calling on the administration to grant long-term student debt relief by executive action.
In January 2022, dozens of Muslim American organizations sent a letter to President Biden calling on the administration to use executive action to establish long-term student debt relief by:
1. Forgiving loans for borrowers whose past payments have already exceeded the principal amount of their original loan
2. Cancelling at least $50,000 in student debt for remaining borrowers
3. Waiving interest payments on current and future loans
4. Extending the freeze on student loan payments until at least January 1, 2023.
That letter was initiated by A Continuous Charity (ACC), CAIR, the Islamic Scholarship Fund (ISF), and the National Association of Muslim Lawyers (NAML). Until last year, payments on most federal student loans had been frozen since March 2020, at the outset of the Coronavirus.
READ LETTER & FACT SHEET: Muslim Community Letter to Biden Admin Calling for “Principled Loans” For All
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.
Because of the rising costs of higher education, many students have no choice but to take out interest-based loans to attend school, trapping them in cascading debt that – in some circumstances – becomes impractical to pay back. Heavy student loan debt is causing younger graduating Americans to delay purchasing homes and starting families.
Every year, thousands of Muslim students who are interested in attending college or graduate school feel that they must choose between their faith and their education because Islam–like some other faith traditions–condemns interest-based debt as destructive and immoral.
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CONTACT: CAIR National Deputy Director Edward Ahmed Mitchell, 404-285-9530, e-Mitchell@cair.com; CAIR Government Affairs Director Robert McCaw, 202-742-6448, rmccaw@cair.com; CAIR National Communications Director Ibrahim Hooper, 202-744-7726, ihooper@cair.com, CAIR National Communications Manager Ismail Allison, 202-770-6280, iallison@cair.com