Question:
Assalamualaikum warahmatullahi wabarakatuh.
I live in the UK and I need an explanation about Student loans. I have researched into it, and it seems like it is haram due to interest. However, one of my friend’s imams said it was halal as it was an investment. Is the imam right or wrong and will it be sinful for my friend to follow his imam?
Answer:
Wa ‘alaykum assalam wa rahamtullah wa barakatuh.
I pray are well.
No, the current form of student loans in the UK is not permissible. Labeling them as an investment does not change the fundamental nature of the contract, which is interest-based and impermissible. I don’t believe it would be permissible to take that other position.
Please refer to this answer for more details, context, and potential solutions. This is a difficult test for many. It is a means for them to be raised higher than they would be without it. Don’t lose sight of that. Ask Allah for a solution. He will give you what is best for you.
May Allah grant you the best of both worlds.
[Shaykh] Abdul-Rahim
Checked and Approved by Shaykh Faraz Rabbani