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Current Loan System Harms 100,000 UK Muslim Students: Survey

A new research has revealed that the current loan system in the UK universities has affected almost 100,000 Muslim students who don’t take loans with interest, as it’s forbidden in Islam.

“We estimate about 100,000 students have been disenfranchised to date since the introduction of higher £9,000 annual fees in September 2012,” stated Sadiq Dorasat, co-founder of Muslim Census, The Canary reported.

“We therefore urge our government to bring in ASF by September 2022 so further cohorts are not so deprived.”

📚 Read Also: How to Finance Your Education without a Student Loan

The survey by Muslim Census found that almost 10,000 students per year are either forgoing university entirely or forced to self-pay because of the lack of provision and Alternative Student Finance (ASF).

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There have been ten cohorts since the introduction of the £9,000 annual tuition fee with 100,000 students impacted so far, it added.

Current Loan System Harms 100,000 UK Muslim Students: Survey - About Islam

Out of the 36,000 respondents, 71% said they felt the current student finance system discriminates against Muslims.

“To receive 36,000 responses within one week went well beyond our highest expectations and required us to urgently upgrade our server capacity to deal with the sheer volume of inbound traffic,” Dorasat said.  

“This response vividly demonstrates the widespread very high real life cost resulting from lack of Alternative Student Finance (ASF).”

ASF is a model of funding that does not accrue interest where students who feel unable to take traditional loans instead make contributions to the education of future students.

Current Loan System Harms 100,000 UK Muslim Students: Survey - About Islam

Halal Loans

In 2016, the UK government approved new charitable Shari`ah-compliant loans for Muslim students to increase diversity on campuses.

The new “Takaful” model was said to allow students to make payments to a communal pot that would then benefit future students wanting to go to university. Yet, the UK government is yet to offer a system where such a halal student loan can be taken.

A halal student loan system could allow Muslim students to take out a loan but make charitable contributions rather than paying interest back.

Britain is home to a sizable Muslim minority of nearly 2.7 million. Islam forbids Muslims from receiving or paying interest on loans.

Yet, according to Sheikh Ahmad Kutty, a senior lecturer and Islamic scholar at the Islamic Institute of Toronto, Muslim students are allowed to take the student loan if they have no other alternative. This is provided they are sincere in their intention to pay it back without incurring interest according to the best of your ability.

Dr. Shabir Ally also says Muslim students are allowed to take loans. He noted that while taking interest is haram in Islam, giving interest when Muslims are pressed to is a different thing.