Sharia student loans: Will Muslim students avoid paying interest on finance for higher education?

Government consultation now underway – with reports Muslims are divided on the issue

The Government is inviting responses to its consultation on whether or not to introduce a student loan that is compliant with sharia law, amid reports that the UK’s Muslim population is divided on the issue.

It comes after concerns were raised that the existing finance options on offer from the Student Loans Company were unsuitable for Muslims, with sharia law forbidding loans that involve the payment of interest.

Announcing the proposed new sharia-compliant scheme at the start of this month, the universities and science minister David Willetts said the loans would “ensure that anyone with the ability and desire can go to university”.

Under the new plans a special advisory committee would oversee a mutual fund pooling model (takaful), whereby those who have been to university and moved on to well-paid jobs help to pay for those who come along after them.

Funds would be withdrawn from the pool for prospective students, who would later make a series of repayments to pay for future generations.

The repayments would be set at a benchmark rate equivalent to that of conventional student loans, in a bid to alleviate the fears of some commentators that Muslim students would end up receiving a discount rate.

Yet in doing so the Government has been criticised for creating a scheme that is only superficially avoiding interest and hiding it behind the “smokescreen” of a fund pool system.

Sheikh Suhaib Hasan, from the UK Islamic Sharia Council, told BBC Asian Network: “By limiting the repayments to a benchmark similar to that of conventional bank interest rates, Sharia-compliant schemes I think are nothing but a smokescreen through which a prohibited matter turns into a permitted one, so it’s better to leave it as it is.”

But that solution will not provide an answer for people like Annesa Maryam, from Manchester, who was among 40 case studies collated in the past year by the Islamic organisation 1st Ethical.

She told the Guardian: “My religion has to be more of a priority to me than my education. It's a real shame, because just a couple of years ago [when fees were lower] I could afford to go to university without a loan. There is no way I could pay the amount needed now, coming from a low-income background.”

But Humarrah Sheikh, 19, said that for many Muslims the loans were not really that big a problem – particularly in comparison to the sheer amount of fees students are now expected to pay.

She said: “It hasn't been that big an issue for me, and I personally think that religion should be kept out of this area.”

Have you tried new the Independent Digital Edition apps?
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs Student

Recruitment Genius: Graduate Trainee

£15000 - £20000 per annum: Recruitment Genius: This Cloud ERP Solution Provide...

Guru Careers: Junior Designer / Design Graduate

£18 - 20k: Guru Careers: We are seeking a Junior Designer / Design Graduate to...

Guru Careers: Graduate Software Developer / Junior Developer

£20 - 28k + Benefits: Guru Careers: We are seeking a Graduate Software Develop...

Recruitment Genius: Graduate Trainee Teacher - Maths

£18000 - £21000 per annum: Recruitment Genius: This organization is the larges...

Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

Day In a Page

On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?
Big knickers are back: Thongs ain't what they used to be

Thongs ain't what they used to be

Big knickers are back
Thurston Moore interview

Thurston Moore interview

On living in London, Sonic Youth and musical memoirs
In full bloom

In full bloom

Floral print womenswear
From leading man to Elephant Man, Bradley Cooper is terrific

From leading man to Elephant Man

Bradley Cooper is terrific
In this the person to restore our trust in the banks?

In this the person to restore our trust in the banks?

Dame Colette Bowe - interview
When do the creative juices dry up?

When do the creative juices dry up?

David Lodge thinks he knows
The 'Cher moment' happening across fashion just now

Fashion's Cher moment

Ageing beauty will always be more classy than all that booty
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination

Health fears over school cancer jab

Shock new Freedom of Information figures show how thousands of girls have suffered serious symptoms after routine HPV injection
Fifa President Sepp Blatter warns his opponents: 'I forgive everyone, but I don't forget'

'I forgive everyone, but I don't forget'

Fifa president Sepp Blatter issues defiant warning to opponents
Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report

Weather warning

Extreme summer temperatures will soon cause deaths of up to 1,700 more Britons a year, says government report
LSD: Speaking to volunteer users of the drug as trials get underway to see if it cures depression and addiction

High hopes for LSD

Meet the volunteer users helping to see if it cures depression and addiction
German soldier who died fighting for UK in Battle of Waterloo should be removed from museum display and given dignified funeral, say historians

Saving Private Brandt

A Belgian museum's display of the skeleton of a soldier killed at Waterloo prompts calls for him to be given a dignified funeral