Student Loans

 

In Canada & England, there has been increase in University and Collage tuition fees recently. Most students are forced to request Student loans, underwritten by the Government. Students go directly to the bank and upon presentation of the proof of admission, the loan is approved. The loan requires students, upon completion of their course, to repay the principle sum borrowed according to inflation rate-related-index.

The problem is, if the repayment calculated on inflation-related-index is actually interest, whether it is still possible to take out such loan for the purpose of obtaining university education? Without recourse to such loans, it would be almost impossible for overwhelming majority of Muslim student to under take university education. The effect of this be undeniably be harsh, given that Muslims in these countries already the most economically disadvantaged group and lagging behind in education would undoubtedly hamper their future economic progress and prosperity.

In U.K certain individuals have been campaigning the government to adjust the existing loan system to facilitate for Muslims students. They have highlighted how ‘Halaal’ mortgages now provide credible alternatives to conventional mortgages, which include interest repayment. The British government on its part is willing to consider suitable alternatives, but the problem is knowing what to do. In this regard, I humbly request you to kindly suggest a method we could propose to the Government, whereby the current student loan scheme could be adjusted, making it suitable for Muslims. A system where you only repay the amount you actually borrow is non-entertained, because the Government wishes to obtain a small return and hence the current system of repayment is on the basis of inflation-related index.

As for the immediate future, until a change occurs, please advise whether it is permissible to take out the existing student loans or career developing loans? Clearly any change is going to take time, and Muslim students need urgent guidance and advise in the meantime.

The issue of student loan taxes the minds of all the Muslims in the country and since the government anticipates proposals from Muslims on the issue, your swift response would be greatly appreciated.

Repayment of principal loans according to the inflation related index is not permissible being interest. I have still not found a suitable alternative for student loan except Qarze-Hasanah (interest free loan), which perhaps not be practicable in those countries.

ONLY ALLAH KNOWS BEST

Riyadhul Jannah Vol. 8 No.10 Page11