Muslim students divided on sharia-compliant loans

Muslim students are divided about government moves to introduce student loans that comply with sharia law. While some have welcomed university minister David Willetts' recent announcement of an open consultation on the issue, others feel indifferent or oppose it altogether.

Muslim groups have been pressing hard for reform because the rise in tuition fees in 2012 brought with it the expectation that students would take out loans and pay them back, with interest, once they had well-paid jobs.

The Department for Business, Innovation and Skills – which is running the consultation – says: "We know that some students, whose religious beliefs forbid the taking out of a loan that incurs interest, may be unable to take advantage of student loans because of this change. This could make it more difficult for them to get a higher education.

"We're exploring the possibility of making an alternative student finance scheme available alongside traditional loans. This funding would be sharia-compliant and overseen by a sharia advisory committee."

Humarrah Sheikh, 19, who is studying for her final A-level exams at Sir George Monoux sixth form college in Walthamstow, north-east London, is against the introduction of a new loan system. "It hasn't been that big an issue for me, and I personally think that religion should be kept out of this area," she says.

Sheikh, who is hoping to study geology at St Andrews University, says many of her peers are equally unfazed by the interest question.

"Most Muslim students that I know have applied for loans and are intending to go to university. If anything, it's the size of the fees that are of most concern to them, just like it is for most other students," she adds.

Semah Ahmed, 17, who is doing AS-levels in Manchester, has little interest in whether loans are sharia-compliant or not. "I do not know anything about the sharia-compliant loans or how they work," she says, "and the issue doesn't matter to me." An Islam-friendly loan model will have little impact on her intention to go to university.

But many other Muslim students will welcome this move because it could remove a barrier to their educational aspirations.

Muslim organisations such as Fosis (the Federation of Student Islamic Societies) say they know of many Muslims students who decided against going to university because of the new system of student loan repayments.

Annesa Maryam from Manchester is among 40 case studies collated in the past year by the Islamic organisation 1st Ethical. She was hoping to study pharmacy at the University of Manchester, but was forced to abandon her dream.

She says: "My religion has to be more of a priority to me than my education. It's a real shame, because just a couple of years ago [when fees were lower] I could afford to go to university without a loan. There is no way I could pay the amount needed now, coming from a low-income background."

Maryam adds that as a result of the current loan system, her four younger siblings will not able able to go to university either.

Under the government's proposed fund pooling (takaful) model, a special sharia advisory committee would oversee a fund that would be fed by students repaying money once they are in employment and earning over a threshold.

The repayments would be set against a benchmark rate equal to that of a conventional student loan. The idea is that such a system would allow students to avoid paying interest, and the pool of funds generated by the repayments would be used to benefit future students.

The government has insisted that despite concerns raised by some commentators, Muslim students will be no better off than their contemporaries under any new scheme, and their repayments will be in line with those of students who take out traditional loans.

Some mainstream experts, such as Martin Lewis, founder and editor of Money Saving Expert, have also backed the introduction of a system that is sharia-compliant.

Kamrul Islam, 16, is due to sit his GCSEs next month and so he's in the age group most likely to be affected by any new loan model.

"I am concerned about the current student loans system and the interest you would have to pay on it," he says.

Islam, who lives in Birmingham and is planning a career in computing, acknowledges that the current system puts pressure on Muslim students and forces them to make difficult choices.

"I would welcome a sharia-compliant model," he says. But whatever happens, he has his eyes firmly fixed on higher education. "If it wasn't to happen, then I would probably still go to university with the current system. Even though it's a struggle, it's for my future."

(Source: TheGuardian)