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Chip mccaw3/18/2023 ![]() Islam, Christianity, Judaism and other religions prohibit usury as a destructive and immoral practice. Black and Latino students are also more likely to default on their loans than students from other communities.Įnding interest-based debt would be a positive step toward empowering students from communities of faith. Broad student loan debt forgiveness would also advance racial justice, as 48% of Black students owe an average of 12.5% more than what they initially borrowed. Implementing this proposal would not only provide much needed relief to the millions of Americans caught in the debt trap and offer borrowers an affordable way to pay back their student loans, it would also provide a boost to the economy at a time of significant inflation and instability. That's why dozens of Muslim organizations called on President Biden to waive all interest payments on current and future loans by establishing principal-only loans, in addition to extending the moratorium on payments until Januand forgiving borrowers whose repayment history equals or exceeds their principal. Before they are able to secure jobs and careers, millions of Americans are being saddled with debt they may never have the means to pay off. Interest on student loans is particularly predatory because it tends to target individuals who are just starting out in life. Interest keeps the borrower in a cascading cycle of debt, from which they are often unable to escape. One of the primary reasons why student loan debt is so damaging to so many millions of Americans is the presence of interest. According to a Brookings Institute report, that number is expected to rise to 40% by 2023-and that report was conducted prior to the COVID-19 pandemic. Add to this crippling debt the skyrocketing prices of housing, healthcare, food, gas and other essentials, and it's not surprising that a quarter of borrowers are currently estimated to be in default or delinquency on their student loans. This number is projected to increase to $2 trillion by 2024 and $3 trillion by 2038. In 2021, the student loan debt collectively owed by 45 million borrowers reached a record $1.7 trillion. But even if he changes course and does so, that alone would not solve the key problem behind the student debt crisis. The president made a mistake by ruling out canceling $50,000 of student loan debt per borrower. President Biden's announcement came with an immediate caveat: "I am not considering $50,000 debt reduction," he said in reference to last month's proposal from Senators Chuck Schumer, Elizabeth Warren and others. Yet when the president announced on Thursday that he is "considering dealing with some debt reduction," it was clear that he hasn't yet recognized the urgency of this issue. A recent national tracking poll from Morning Consult and Politico found that 64% of respondents supported the idea. Forgiving at least some student loan debt is one of the few popular policy ideas that President Biden could implement on his own with the stroke of a pen. ![]()
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