Interest-bearing Student loans
Are we permitted to take out interest-based tuition fees? If not, what is the solution?
Assalaamualaykum. I wanted to ask about University. In England, we have tuition fees which is paid for us because it is 8/9 grand a year now. But interest is accrued from the first day we are given it (although it is directly paid to uni and not in our hands). There is no other way to go to University. What do we do in this case? I have heard that it is still not allowed which I totally agree with as it is riba, and it is a major sin and forbidden by Allāh in the Quran. But what I wanted to confirm and ask is, is that true – are we not allowed to get these tuition fees? Also can you please tell and explain the reference about riba in the Quran and the punishment etc? Because I believe it is something we all need to hear. Jazakallah
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
Interest-bearing loans constitute riba and are harām regardless of whether one is paying interest or receiving it.
The Glorious Qur`an [2: 275] states:
وأحل الله البيع وحرم الربا
Translation: Allah has permitted trade and forbidden ribā (interest).”
The Glorious Qur`an [2: 278-9] also states:
يا أيها الذين آمنوا اتقوا الله وذروا ما بقي من الربا إن كنتم مؤمنين، فإن لم تفعلوا فأذنوا بحرب من الله ورسوله
Translation: O you who believe, fear Allah and leave out what ribā is left, if you are (true) believers. If you do not do so, then be warned of war from Allah and His Messenger.
The Qur`an [3: 130] further states:
يا أيها الذين آمنوا لا تأكلوا الربا أضعافا مضاعفة
Translation: O you who believe, do not consume ribā, doubled and multiplied.”
The prophetic traditions on the prohibition of all types of ribā are also explicit.
Jabir ibn AbdAllah (may Allah be pleased with him) narrates:
لعن رسول الله صلى الله عليه وسلم آكل الربا وموكله وكاتبه وشاهديه وقال: هم سواء
Translation: Allah`s Messenger (peace and salutations be upon him) cursed the one who receives interest and the one who pays it, the one who records it and the two witnesses to the transaction and he (peace and salutations be upon him) said: “They are all similar [in guilt].” [Sahīh Muslim, 3403]
He (peace and salutations be upon him) said:
درهم ربا يأكله الرجل وهو يعلم أشد من ستة وثلاثين زنية
Translation: A dirham of ribā which a man consumes knowingly is worse than committing adultery thirty six times. [Musnad Ahmad, 23046]
Abu Harairah (may Allah be pleased with him) narrates:
قال رسول الله صلى الله عليه وسلم أتيت ليلة أسري بي على قوم بطونهم كالبيوت فيها الحيات ترى من خارج بطونهم فقلت من هؤلاء يا جبرائيل قال هؤلاء أكلة الربا
Translation: Allah`s Messenger (peace and salutations be upon him) said: On the night of Ascension I came upon a group of people whose stomachs were like houses with snakes visible from the outside. I asked: who are these people, O Jibrā`īl? He replied: they were people who had consumed ribā (interest).” [Sunan Ibn Majah, 2269]
However, the UK Government is considering facilitating a Sharia compliant student loan scheme for the benefit of Muslim students. See the following points:
- Read the information at the following link: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/299124/bis-13-1311-consultation-on-a-sharia-compliant-alternative-finance-product.pdf and thereafter respond to the government initiative at: https://www.surveymonkey.com/s/studentfinanceconsultation.
- Join a campaign in lobbying the relevant authorities to introduce required legislation and provide an interest-free and Sharia-compliant student loan scheme for Muslims.
- Contact your local MP in writing at http://findyourmp.parliament.uk/ and ask them for their support in this matter by urging Rt. Hon. David Willetts MP, the Secretary of State for Universities and Science, to attend to the issue
- Sign the following e-petition: http://epetitions.direct.gov.uk/petitions/54508
- Some Muslim organisations have also proposed a suitable model which can be proposed to the Government. This model can be viewed at:
http://www.1stethical.com/an-alternative-student-finance-scheme/. All Muslims should respond to the Government and present their requests at the following link:
- In the meantime, while there are other avenues which could be assumed explored, Muslim students should consult their local Ulamā who may assist them in writing a Sharia compliant agreement between the student, the university and the student loans committee whereby the student would not be compelled to enter into an agreement to pay interest. The Ulamā or the students should then write a letter or speak directly to the student loans committee and the relevant university and explain their aversion to conventional insurance and request an interest-free loan on religious reasons. The university may then enter into a separate agreement with the loans committee to pay, for a specific period, the additional amount equivalent to the normal interest accrued on the loans from the bursary or a hardship grant to be awarded to the students. However, the students should ensure to pay all university fees promptly as they fall due. We have personally contacted some students studying at the universities in U.K who have tried this and they were successful in gaining an interest free student loan.
Nevertheless, most important of all, we must be sincere in our intention and keep faith in Allah and invoke Him to create ease in our affairs. Our endeavours will only prove fruitful by the will and permission of Allah. May Allah correct all aspects of our lives and assist us in doing so. Ameen.
And Allah Ta’āla Knows Best
Hanif Yusuf Patel
Student Darul Iftaa
Checked and Approved by,
Mufti Ebrahim Desai.
 كل قرض شرط فيه الزيادة فهو حرام بغير خلاف
[Al-Mughnī, 6: 14, Dar al-Hadīth]
 Also found in [Sunan at-Tirmidhi, 1206; Sunan Ibn Mājah, 2273; Sunan Abi Dawūd, 3333; Sunan an-Nasā`I, 11054; Sunan al-Imam Ahmad; Sahih al-Bukhari, 1980]
 The following avenues may be explored in order to gain a qualification without compromising our religious principle:
- Undertake a part-time degree. Fees for part-time studies are generally charged at around half the full-time fees.
- Enrol at Open University.
- Enrol at a higher education centre or a training institution close to home.
- Take a gap-year
While studying a part-time degree, taking a gap year or studying from or close to home, one may simultaneously take part-time employment which may allow the student to use the income generated to fund studies and save costs of commuting and accommodation.
- Apply for an apprenticeship. This will allow one to gain a real qualification whilst gaining experience by working and earning a real wage.
- Undertake a vocational course or vocational training. This will be affordable, it will require less time to complete the course and it will allow a student the flexibility to take classes while working and may be complete a whole degree with the extra money earned.
- In the interim you may defer going to university and apply for an administrative or basic vacancy in an employment relevant to your future career. You may then save the money and gain a teaching or any other professional qualification afterwards or whilst working.
- Apply for a “fee waiver” offered by many universities and colleges, so reducing the cost of your university tuition. However, this may only be available to low-income homes and thus you should first contact the university you are applying to and enquire about the eligibility requirements. Moreover, you may apply for an annual maintenance grant, a bursary or any other funding sources which would then also cover the tuition fees of those offered a fee waiver. Also see: http://www.thecompleteuniversityguide.co.uk/university-tuition-fees/other-financial-support/national-scholarship-programme/
- Explore Muslim charities and foundations providing grants and scholarships to students.
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