Young Muslims Want The Student Loans System To Change. Here’s Why

You might not be aware, but paying and receiving interest is considered haram, or impermissible, for Muslims.

While it’s possible to find Islamic-compliant ways to do banking (i.e getting a mortgage from an Islamic bank, or starting an account with one), there are some roadblocks that are affecting Muslims navigating university loans.

Currently, the Student Loans Company, which most students use to pay their tuition fees, does not offer interest-free funding.

Interest, or ri’ba as it’s known, is prohibited as it’s income that isn’t earned justly – it is collateral that often doesn’t help the poor. This prohibition means some Muslims are either delaying their studies until they have enough saved up to pay the fees upfront, or they are eschewing uni altogether.

Which is why various Muslim charities, including Muslim Census, MP Stephen Timms, and Lord John Sharkey, are calling on the government to provide alternative student finance by September 2022.

This comes after former prime minister David Cameron made promises in 2013 to introduce Shariah-compliant loans, but after initial frameworks were introduced, plans were abandoned.

Now, new research by Muslim Census has found that almost 100,000 students have abandoned or self-funded their studies due to a lack of alternatives.

Young Muslims are abandoning their university dreams.

staticnak1983 via Getty Images

Young Muslims are abandoning their university dreams.

The research found that 71% of Muslims found the current system to be discriminatory against their faith.

But the Islamic-backed loans system they propose doesn’t mean that Muslim students get cheaper fees to their peers. In fact, their proposed plans would offer a mutual aid system that benefits all students.

Asha Hassan, a lead campaigner with Muslim Census, explains that instead of paying interest to the loans company, Muslim students would pay into a fund that is recirculated among future and current students.

“The government has already scoped out a viable solution available to all students that is not interest based. This does not mean we get special treatment and pay less,” Hassan explains.

“Instead, students will borrow from a ring-fenced fund that will be used only to support students. Before borrowing, they make a unilateral commitment to support that fund by contributing a pre-agreed amount.

“Once they graduate and earn over the threshold, they pay what they owe and they also pay back into the fund that is only for students. In that way the model is more ethical and of mutual benefit for students.”

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