Muslim students call for interest-free alternative to student loans

Muslim students have urged the government to act on its promise to roll out shariah-compliant student loans, as it emerged tens of thousands of young people are forced to abandon or self-fund study because of a lack of alternatives.

A coalition including MP Stephen Timms, data collection organisation Muslim Census and the National Zakat Foundation, a charity, on Tuesday called on prime minister Boris Johnson to take steps to roll out alternative finance for Muslim students by September 2022.

The intervention follows a letter sent in June from dozens of organisations including the Muslim Association of Britain, The National Union of Students and educational equality charity Fair Access Coalition, demanding that “future cohorts of students should not be deprived of accessing a university education, simply because of their religion”.

The government policy of offering only student loans that charge interest — a concept forbidden in Islam — has disrupted the education plans of 100,000 students, according to a survey by the Muslim Census published last week.

Mufti Mohammed Zubair Butt, an Islamic scholar, said interest-accruing loans were prohibited in Islam because lending money must be for the purposes of helping someone rather than making a profit. “You do that for the pleasure of God, you aren’t going to take any benefit from it.”

The prohibition, and a lack of alternative options, means one in 10 prospective Muslim students misses out on university and one in six self finances, according to the census. About 36,000 Muslims attend university annually.

Annesa Mariyam, now 26, intended to become a pharmacist and achieved the grades to go to university. As one of five siblings in a low-income household in Manchester she had no way to attend university without a loan, but decided she could not break the principles of her religion.

“I did everything I could, but ultimately I couldn’t afford it,” she said. She has since begun an apprenticeship with the civil service after finding her pay in a role as a private school teacher limited by the lack of a degree. “I just couldn’t put my faith on the back burner. It’s a serious thing.”

Asha Hassan, an organiser of the petition, who 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.

“I went to so many access schemes that really made me aspire to university and it made me feel very isolated to find after that there were no options,” she said. “It is an injustice that could be so easily solved.”

David Cameron pledged to address the problem in 2013, when he was prime minister. A consultation recommended the government introduce an alternative Takaful fund, administered separately from interest-bearing student loans, into which graduates paid agreed contributions and students receive support. But there has been little movement since.

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Campaigners hope the evidence of the Muslim Census will demonstrate the urgent need for change. But they say the government is sending mixed messages. Timms said Michelle Donelan, the universities minister, had indicated in a recent meeting that the commitment no longer stood and the government was merely considering the issue, while prime minister Boris Johnson reiterated the promise in an email sent to a constituent.

The Department for Education said it was “considering alternative student finance carefully” ahead of its response to the 2019 Augar review into higher education, which is expected this autumn, adding it would “set out further information in due course”.

The student loan system already faces a period of upheaval, as the government plans to extend loan entitlements to further education courses while lowering the threshold at which graduates begin to repay what they have borrowed.

The Treasury hopes to claw back more of what is loaned out to students, as it currently receives less than half of what it lends, despite charging high levels of interest.

John Sharkey, a Liberal Democrat peer and one of the signatories of the letter, said introducing an alternative system was “entirely possible” and that “radio silence” from the government on the issue had not been explained. “We are genuinely puzzled at the length of time it’s taken,” Lord Sharkey said.

“I just feel like it’s been so long,” Mariyam said. She recalls the shock and outrage her and her then-teenage friends felt when tuition fees were tripled in 2010, and many realised they would face the stark choice between taking out a loan and going to university.

“I thought that a change would have been made because of how inaccessible it made going to university,” she said. “The fact that it’s now a decade later — it just looks like they don’t really care.”


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