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Student Loans on Inflation Rate

Answered as per Hanafi Fiqh by DarulIftaBirmingham

Answered by: Mufti Mohammed Tosir Miah


Student Loans on Inflation Rate

In the name of Allah, the Most Beneficent, the Most Merciful.


There are two options for students in the aforementioned scenario. They can either take a conventional loan or a government loan like student loans.

A conventional loan is where a person takes out a loan from a bank and he repays it with interest.

Student loans on inflation rate through one angle seems like a conventional loan as the student does not pay back the original amount rather he or she pays back the current value of that loan due to inflation. However, an argument can also be made that it is not like a conventional loan. This is due to a number of reasons:

  1. When he or she passes away, the loan is written off.
  2. If one is earning less than £15,000, one is not entitled to repay the loan at this present time.
  3. When he or she reaches 60, he or she is not required to pay it back.

The best advice for students will be that they refrain from taking student loans and look at other alternatives to pay for their fees like finding a part-time job or a relative or friend who will assist by giving an interest-free loan.

However, if the above alternatives fail, then as it is important especially in this day and age for Muslims to be educated and assist the Deen through various other capacities, it will be permissible for Muslim students to take it. I will nevertheless stress, this should only be done as a last resort when other alternatives have failed.

Only Allah Knows Best

Written by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham

This answer was collected from DarulIftaBirmingham.co.uk, which is run under the supervision of Mufti Mohammed Tosir Miah from the United Kingdom.

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