A Halal Alternative To Student Loans! Well, Almost…

By Abu Eesa Niamatullah

How much do you value higher education in the West? Is it a basic human right? Or is it a privilege?

These questions have received a greater focus in recent times with the introduction of tuition fees etc. at University level as well as funding cuts across the entire higher/further education field. Although these extra charges have also been supplemented with various government-backed student-loan arrangements, the clear prohibited interest-based nature of these conventional financing methods prevents Muslims from taking advantage of such loans.

So do Muslims just ignore the education system and condemn themselves to the lower stratums of society for the foreseeable future? Should we grin and bear it? Or should we push forward proposals for a permissible alternative for all those Muslims (and non-Muslims) who don't want to get involved with interest or usury? Shouldn't we fight for what is right and what is our right – an education which according to the 'Ulema is at the very least a fundamental basic need (hājah) in such times and circumstances for the Muslims in the West.

I feel that people generally fall into a few categories when it comes to how they approach this issue:

  •  You are from those who received a good education whilst it was still free, have done well as a result of it, and don't care too much about what's going on now. You'll read this piece and won't bother doing anything at the end.
  • You are that actual student who is facing all these fees and you've exhausted all possible sources for halāl financial help. You must continue your studies, but you don't know what to do because all the available avenues for financing such as student loans are harām
  • You're either from the above, or you didn't even get an education, but you've got children who will soon be going or are currently going to university and guess what? You're paying. So now, you're very interested in all this stuff! I find myself in this category whether I like it or not, but being forced into this position means I'm not proud of it.
  • You realize (whether you're educated or not, at cost or not, having to pay for your kids or not) that as a Muslim, to enjoin in the good and to try and prevent all that is wrong is a huge individual obligation upon you. Ensuring that Muslims receive your full support and assistance in their pursuit of education so that they can better themselves and benefit others, is from the best of actions that you can do in this society. And here I hope to find myself and many of you to be from this category (and I'd be super proud of it too!) because we know that this is the level we operate at – at a Prophetic level implementing his guidance (sallallāhu 'alayhi wa sallam) when he said, “ Allah will support his servant as long as the servant supports his brother.” (Muslim)

Truth be told, I don't care what category you fall into but what I do care about is that you add your voice and efforts to those at Al-QalamFOSIS1st Ethical and the NUS who have released this important statement here, effectively updating us of their considerable efforts and achievements so far to even get a potential government proposal of a halāl alternative financing model on the table for students based on a commodity Murābahah model.

Now it's over to you. We need you to see this effort home by carrying it over the finishing line: prove through your activity and urgency to the Department of Business and Industry that to offer this halāl alternative to student loans is something that they must do, and not do so a few years down the line but do it now.

If you have better ideas on how to show the large numbers of people affected by the lack of alternative financing and/or have other convincing arguments then you just go right ahead, but we also have a plan:

  •  Contact your local MP by going here. Write to them and ask them to support this vital issue by putting pressure on the Rt. Hon. David Willetts MP, the Secretary of State for Universities and Science. And you make sure you remind your MP of their duty to you as a voter, and their duty to their constituents in aiming for a more educated, financially and politically stable community, and that this is in your MP's interest and the interest of all those who depend on said MP.

Ok, perhaps “interest” isn't the most appropriate word to use here but you know what I mean. Or just use this template here then. You lazy bunch of…

  •  Contact others whom you feel will be able to put pressure on the government to speed this process up. Your university Vice Chancellor is an excellent example of such a person. The government will definitely listen to the heads of their universities, especially in the current political climate. You need to show yourself to be savvy enough to get them on board.

Ultimately, this effort will only prove successful if Allah jalla wa 'ala blesses it based upon the sincere intention to better our condition in our countries. But it needs people like you to not just read this and that's it, but to read it, realise that it really is you I'm talking to, and then share this, energise yourselves and get busy and work towards creating something better for ourselves and our future generations.

Note: it would be most helpful to the organisations behind this campaign if you send a copy of any correspondence you send to your MP etc, or any other record of your activity, to 1st Ethical either here or at info@1stethical.com

18 Responses

  1. Aziz Gilani

    I seriously question the whole concept of Interest = Riba. As Mahmoud El-Gamal pointed out in his book ‘Islamic Finance’ these ‘halal’ schemes are just examples of shariah arbitrage; taking advantage of Muslims by charging them higher interest rates in arabic-islamic wrappings.

  2. Muhammed

    Anything in the US? And great initiative, mA, may Allah SWT make it successful!

  3. Shabeeb

    Asalamailaikum, I’m surprised by the lack of responses on this post. This is such a critical subject in our daily lives. I live in Canada, and was wondering if this initiative can extend here? I’m very interested in this.

  4. nlightme please

    The issue of loans and RIBA is the single most important issue of our time. Where are the scholars to tackle these issues? We definitely need alternatives, foundations, and more debate amongst the learned of our ummah. We have not even touched the surface of this issue and many people will fall victim of this endless cycle.

  5. Ibn Momin

    I think the big solution is to have free higher education like it is in scandinavia (finland, sweden, norway) but for countries like UK, Canada, USA etc. the community there need to step up and come up with practical alternatives (though I’m not sure how many people are actually interested):

    1. Students who want to educate themselves interest free can setup a fund to help each other out (every student who graduates through this fund pledges to continue to put something back after graduation or once settled with job etc.)
    2. The local muslim community setups a scholarship fund and provides to deserving students
    3. kickstarter.com, crowdcube.com styled crowdsourcing donation model for students only. A student would have to apply by submitting a compelling story about himself, his background and why he should be funded. Students from all over the world would be part of it and in the end everyone benefits. I’m sure non-muslim students would equally be interested in such a service.

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