Categories: News

Student Finance Commissioned To Deliver Sharia-Compliant Student Loans By 2026

Muslim Census recently announced that decisions have been made to offer alternative student finance. Catering to Muslim students, plans are in the pipeline to offer Sharia-compliant student loans, with a delivery date of 2026. 

The request for an interest-free alternative to student loans has been made since 2013, yet many years later, the government has failed to deliver such a product. In a report by Financial Times, Islamic Scholar, Mufti Mohammed Zubair Butt mentioned, “Interest-accruing loans were prohibited in Islam because lending money must be for the purposes of helping someone rather than making a profit.”

Back in 2013, David Cameron promised to address the issue when he was prime minister. A solution was invented known as the Takaful fund, which consisted of graduates paying contributions and thereafter students receiving these funds for support. However, since this move, very little has been done to progress. 

Since then, the government has been going back and forth on the issue, without much in the way of anything promising. 

The research and evidence published by Muslim Census has shined much-needed light on the issue. On 9 March, they published a post stating that their “survey evidenced that the lack of Alternative Student Finance options was causing a barrier to education for thousands of Muslims.”

In this survey, they found that 10,000 Muslim students per year are impacted due to the lack of a Sharia-compliant alternative to the Student Loans. At the time, the government had promised to introduce an alternative by 2025, but this was not implemented. 

It wasn’t until late 4 May 2023, when Muslim Census tweeted about their discussions with the government on providing Sharia-compliant student loans. Fortunately, things have now been commissioned, and works are finally underway to make this a reality for many disadvantaged Muslim students by the year 2026. 

For Muslim students looking for an alternative to the current Student Loans, this is a huge moment.

The next step involves the Department for Education commissioning Student Finance England to deliver this alternative product. This petition has mainly been overlooked by Asha Hassan, who according to a report by Financial Times, self-funded her medicine degree as she refused to take on an interest-bearing loan, said she “struggled through university” despite being lucky enough to secure scholarships and bursaries.

Many are to thank for this immense work, including all the organisers of the petition, as well as the following organisations: Islamic Finance Guru, National Zakat Foundation and The British Board of Scholars & Imams (BBSI). 

Muslim Census Finds That Muslim Students Are Disadvantaged

An online survey by Muslim Census gathered results from nearly 40,000 Muslims and found that many are impacted by the lack of an alternative to student loans. It also found that more than 1 in 10 qualifying Muslim students miss out on university entirely directly because of the lack of an alternative to student loans.

What’s more, over 6000 Muslim students are choosing to not attend university at all due to this problem. Worryingly, 4 in 5 Muslim students who took out the existing student loan felt like they had compromised their faith.

It was also confirmed that 1 in 6 Muslim students are self financing directly due to the lack of ASF, which has negatively impacted the choice of course and university.

“With Muslim communities especially affected by economic deprivation, improving the life chances of 12,000 students annually through granting them equal access to funding a degree would help to break the cycle of inter-generational poverty, and demonstrate the government has a meaningful commitment to deliver on its aim of levelling up equality of opportunity,” stated Rizwan Yusoof, Director of Services of National Zakat Foundation, one of the organisations who facilitated the survey.

Juber Ahmed

Juber Ahmed is our Digital Editor and travel enthusiast with a keen interest in Islamic history and heritage. He travels with his wife to various places around the world and writes about his experiences.   Juber's favourite Quote... "The World Is a Book and Those Who Do Not Travel Read Only One Page" [Saint Augustine]

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