Muslim students call for sharia-friendly loans

[Sophist]

Muslim students call for sharia-friendly loans

 

Polly Curtis

Monday April 26, 2004

 

Pressure is mounting on the Department of Education and Skills to provide a Muslim-friendly student loan.

 

Representatives of the Federation of Student Islamic Societies met with the education secretary, Charles Clarke, last week to discuss the problem, which affects students and their families who believe that taking out a student loan contravenes Islamic sharia law.

 

The law dictates that Muslims should not pay or receive interest on loans.

 

However, the Muslim community is split over whether student loans, which incur inflation-only levels of interest, are against sharia law. Student activists say that some Muslims are being asked to break their faith or forgo the opportunity for financial assistance during their studies.

 

The meeting follows new moves towards providing alternatives to suit Muslim families in the commercial sector. The HSBC bank has set up a Muslim-friendly mortgage and pension scheme which satisfies the demands of sharia law.

 

Hasan Salim Patel, of the Federation of Student Islamic Societies, said representatives were given a clear message from the education secretary that the DFES would consider any alternatives to the traditional student loan which were put before it.

 

"We've been asked to research the options, which we will do," he said. Possibilities the federation is considering include an endowment or tax which would oblige Muslims to repay fees, but with no interest attached.

 

A spokesperson for the Department for Education and Skills said: "We appreciate the Muslim position on borrowing. But, it is important to remember that student loans do not incur a real rate of interest and the government does not make any profit out of these loans. The uptake of student loans amongst Muslim students compares favourably with other groups.

 

"We have no plans to introduce different loans for different groups but we are working closely with the Federation of Student Islamic Societies on other ways forward on this."