Muslim nonprofit eases student debt with interest-free loans

Tahreem Chaudhry has wanted to go into health care since she first volunteered at a hospital in high school.

“It was really powerful to see how in a very short amount of time you can change somebody’s life in such a significant, drastic way,” Chaudhry recalled.

But upon finishing undergrad and deciding that becoming a physician assistant was the right career path for her, Chaudhry quickly realized she didn’t have enough money saved up to afford the six-figure tuition cost. And as a Muslim, Chaudhry wanted to stay away from taking out student loans that acquire interest — religiously, Muslims are not allowed to collect interest in order to maintain a more equitable society.

» READ MORE: Arabs have a longstanding history in Philadelphia — and this bilingual newspaper honors it

But about six months after Chaudhry had to turn down a position in a PA program because she didn’t have a way to pay for it without taking out loans, she was introduced to A Continuous Charity (ACC) — a nonprofit organization that, through community support, provides interest-free student loans across 10 states, including Pennsylvania. Soon after, she was admitted into an even better PA program, and is now close to finishing her degree and starting her career.

“The (religious) influence has a lot to do with the concept of those that have the means should support those that don’t have as much means,” said Heidar Albandar, president of the Pennsylvania ACC chapter. “We’ve been provided this wealth from God, and the idea is to spread it forward. We want to do what we can to make others successful, because it takes a village to raise or to educate people.”

» READ MORE: For one immigrant, Philadelphia Arabs is more than just a Facebook group — it’s a lifeline

The main purpose of providing interest-free loans is to establish more equity and access to education, particularly among communities that disproportionately face financial barriers. Today, more than 45 million Americans owe over $1.7 trillion combined for their education — and studies show that students of color, particularly Black students, shoulder more of that burden.

“Even if I didn’t ascribe to Islam, anybody can see how detrimental this whole interest in student loan crisis has been — it has left an entire generation of students unable to meet some of their most basic needs because they’ve been shackled to an institution,” said Chaudhry. “You have a generation who’s super well-educated, who have all these talents and skills, but they’re not getting anything in return — everything they’re making is going to these institutions that are already mega rich… and it’s causing people to remain in the same socioeconomic status they were born into.”

The other impact of the student loan crisis Chaudhry and others highlighted is that it discourages people from pursuing higher education in an attempt to avoid too many loans. Chaudhry herself put a pause on her education until she could figure out a better financial option.

“We think education is the key to advancement in society.”

“We’re looking to encourage education, we think education is the key to advancement in society,” said Albandar. “And we think that being able to do so by reducing the debt burden, which includes interest, is the way to go about this.”

Albandar said he’s heard form multiple students who have benefited from ACC say they wouldn’t be pursuing their degrees were it not for interest-free loans.

By receiving donations from community members, ACC provides a minimum of $10,000 loans to students (who do not have to be Muslim) chosen through the application process, which includes essays, letters of recommendation, community service history, tax statements and interviews. In 2021, ACC Pennsylvania provided a total of $222,791 interest-free loans to 14 students. The program also coaches students on how to go out into the community and ask for micro loans on their own.

In order to account for inflation, Albandar said ACC has set up endowment funds that have been able to cover concerns of inflation and operational expenses.

For Najah Siddiq, who is majoring in organizational development at Temple University’s College of Education, receiving an interest-free loan from ACC helped cover the tuition costs that her scholarships and grants did not cover. Now she can save up more of her money for other necessities.

“You always hear of student loans being this huge burden on people for their entire lives — I have family members that are well into their careers who are paying off student debt from 20 years ago,” Siddiq said. “Being able to do interest-free offsets a little bit of that burden. You’re paying the same thing either now or later, it’s not like you end up having to be thousands of dollars more because of interest.”