Did you even read the article properly? Furthermore, even if there is only a minority of Muslims who would want shariah-compliant loans in Canada, I still feel like something should and can be done to accommodate them. Now I am left with no option but to get loan under CSLP scheme which bears Interest, and I have to reply till 3 June, 2013. If this is not “riba”, then what is it. These student loans … Ruling It is permissible for Muslim students to obtain loans offered by non-Muslim governments to their citizens during their university studies, providing such loans … This is a personal issue for me – not just a series of statistics. Any form of financing made according to Islamic law, which forbids the payment or receipt of interest.An Islamic loan may be an interest-free loan, but often it is a more complex transaction.For example, a bank could buy an asset for cash and then re-sell it to the "borrower" for a profit such that the profit is the same as the bank would have made had it extended a regular loan. Although I was hoping to get some scholarship but that has not materialized. I disagree on the analogy between a student loan and an Islamic mortgage. There are currently 3 different opinions on … I know of some personally, and it wouldn’t take more than a quick googling to find more examples of students like this. The current student loan system is impermissible, as it amounts to an interest based contract (ribā) which is prohibited. Required fields are marked *. Islamic Sharia law prohibits 'Riba' – the paying and receiving of interest for profit. Some of these services may include basic personal loans, business loans, loan consolidation … Save my name, email, and website in this browser for the next time I comment. – Anything which will credibly lead to one of the above. And I’m one of those Canadian Muslims who do disagree with you. Even if they are in the minority, there *are* those who simply choose not to enroll in post-secondary education because of their hesitance in taking student loans that may result in interest. Just over half said yes; of the remainder, 88% said that loans were a good idea for some students, but not for them personally. May Allah Ta’ala. Your email address will not be published. Performance-based contracts, by construction, are not debt contracts from a Sharia point of view. You do not need to research and go into great detail on this matter. This has led to a large number of young Muslims missing out on … In response the growing student debt as well as in line with the Islamic principle of avoiding interest, The Islamic Society of North America and the Islamic Development Bank created a unique interest-free loans … According to my friend, some Imams say it … ‘Riba’ and ‘interest’ are different concepts. I am a Muslim brother in US, right now I am on my final semester of my Master degree in information system. Do you believe children deserve more love not less? [4] Given that I have not come across anything conclusive which passes the evidentiary bar of the Sharia to overturn the original ruling of permission for this type of contract in principle, the default ruling would thus persist, and I would therefore agree with Shaykh Haitham al-Haddād’s conclusion, even though I find his framing of the student loan arrangement as a form of Mudāraba unnecessary. [3] https://www.islam21c.com/islamic-law/on-sh-haithams-student-loans-fatwa/. It is true that the Sharia mandates forbearance (إنظار المعسر) in case of the borrower being in financial difficulty, but forbearance does not cancel the debt—it still remains and is collected even after death from one’s bequeathed estate. is their any one who could structure student loans base on, murabaha, wakala, ijara maushufa biththima or bai muajjal… I am looking for interest free loan in US. I came across this site. Related. Furthermore, if you’re surveying the largest Muslim country in the world – wouldn’t questioning students about whether or not they would get a loan imply – to some degree – that the institution issuing the loan would have a high probability of satisfying Islamic requirements – as part and parcel of being in that country? I’d like to see some more of your data, and your research methods. Did you ask for statements from students showing no interest on their statements? 25 Comments, “From my reading of the contractual and operational framework of the process, I conclude it to be a permissible arrangement”. Normally, Islamic banking gets around the problem of interest by having the bank co-own an asset while the loan is being paid down (Islamic mortgages are essentially rent-to-own deals); but, that’s admittedly difficult for a student loan where there’s no hard asset against which to borrow. I am thinking of creating an Islamic student loan program to help our Umma in US/ Canada to increase the level of education in Islamic families. I am NOT opting for Loan under Canada Student Loan Program because it bears Interest, therefore, I AM NOT GOING TO GET THE DESIRED MBA DEGREE. (Except when it doesn’t), https://darulfiqh.com/knowledgebase/are-student-loans-a-mudharabah-investment-contract/, French government bans nine masājid in desperate attempt to punish Muslim community, Uyghur activists take aim at multinationals sponsoring 2022 “Genocide Games”, International NGOs submit formal complaint to the UN against France’s anti-Muslim policies, Sri Lankan forced cremations: 36 British Muslim groups deliver joint letter to High Commission, American Muslims urged to exercise caution in light of Capitol Hill carnage. With a bit of tinkering, the US Government’s graduated repayment student loan scheme, as well as the Swedish student loan system, would both meet that test – especially since there is no profit involved. It is true that the student loan contract stipulates something called “interest” to be added to the “repayment” of the “loan”, which can be compounded during the term of the “loan”. due to the fact that I am taking only one class, I am not qualify for federal loan. Even in the Quran and hadees nowhere it says bring changes in the Hukm of Allah subhana tala. [3] This was based on his alignment of the loan’s structure to the well-known Mudāraba arrangement found in the books of Islamic Fiqh. Any … Student loans have not been much of an option either for Muslims, as many have avoided it for fear of falling into riba (interest). Every once in awhile, someone in the student movement hears tell of interest in Islam being prohibited, thinks about student loans for a microsecond, and then comes up with the idea that student loans are “unislamic” … By doing this, we hope … Based on your line of thinking, a whole list of contracts all of us are involved in would be Haram too. In light of this, without riba, gharar or oppression being a part of the structure, and with real value-adding work being an actual part of the arrangement, I conclude the student loan offering in the United Kingdom to be a permissible one from the perspective of Islamic Fiqh. Faith-Based Financing Faith Based Financing FAQs Murabaha Shariah Board Approval Heter Iska Stay Connected Islamic Financing Devon Bank has been offering Islamic Financing designed to avoid conventional interest common in traditional loans since 2003 for home purchases and refinancing from traditional loans. Interest-free loans provided by Muslim charitable organizations – in absence of wide-spread shariah-compliant loans: http://www.isna.net/events/Special-Announcement/Islamic-Develoment-Bank-Scholarship-Program.aspx, I am currently in Pakistan and got admission in Rotman School of Business in Full Time MBA. Though it is theoretically be possible to create Sharia-compliant student loans, the market for them is tiny, even in Islamic countries. https://darulfiqh.com/knowledgebase/are-student-loans-a-mudharabah-investment-contract/. Are you ready for our first ever NATIONAL CAMPAIGN? Did you take out a student loan before you decided to conclude it was permissible? The proposed system will enable people … Anyways, it was nice speaking with you. The prohibition can apply to excessive or unreasonable interest, but may also … Is not Islam’s purpose in this regard to judge things based on its own customs? Where the loan does not involve riba, and the student pays back what he took, without … In concluding, the fatwā deems the current student loans situation (2013) to amount to ribā which is prohibited, on the basis that the lender demands an increment on the basis of inflation. Assalamualikum. I came into a new idea that I would like to hear opinions about. Representation matters! Alongside his contemporary studies, Sheikh Sajid was a student of a Qur'an academy till the age of 18. With regard to student loans, they must fall into one of three categories: 1. The main reason that this group of students did not want a loan was because they did not need one. Similarly, it might be that only a minority of Muslim students in Canada observe regular prayers – but almost every university campus has a dedicated prayer space, justified by the numbers of people who benefit from them. If you don’t need a loan, why don’t you help others with a one-off or regular donation? Those who do taqleed on four madhab will never fall for these kind of harram, This fatwa is equally bad to those who claim mortgage is halal not riba it is something else, This fatwa easily fails mufti faraz fatwa of sheikh haitham last fatwa which was equally wrong Is there any ruling regarding maintenance loans in the UK, many if not most students who take tuition loans also take maintenance loans to cope with the high uni living costs, however in my case at one point I was living at home, and just saving up the maintenance loan, using it to spend on luxury items, is there any ruling in this? What is the Islamic view point on UK Student Loans… I happen to be a part of that subgroup of students who do care about shariah-compliancy, and statements like “many Muslims simply don’t care about shariah-compliancy” do make me feel under-represented. They follow a value-oriented approach consistent with Islamic finance principles. It looks like riba, it sounds like riba, the people giving the loan are calling it riba. Could anybody in this pool guide me if there is any chance of getting an interest free load. Please kindly direct me. I have details of the idea in my mind so if anyone interested, drop me an email at ksjarral82@yahoo.com. The views expressed on Islam21c and its connected channels do not necessarily represent the views of the organisation. Subhanallah, so many people attacking the writer with no actual objections to the argument. The longer it takes to repay a student loan, the more interest is paid on the loan. All rights reserved |. Sheikh Bilal Philips answers a question about taking student loans. This is what happens when people decide to focus on issues more then thye are supposed to they mess up and give these kinds of fatwa And those companies are seeking to make a profit from the debt. See Al Qalam’s overview and research paper for the Islamic viewpoint on student … The topic thus requires understanding conventional economics and finance among other contemporary subjects, partly because this is not as simple as a transaction between two individuals, but rather an operation between a government and its citizens. See: AAOIFI Sharia Standard (13). Like Rabbil, many Muslims hoping to get an education face a dilemma – to take out or not to take out a student loan. I know, practically, there would be many hurdles but still for such a bigger cause, if we could work sincerely and honestly towards the cause, we can slowly but surely reach to that goal. Thanks More Islamic financial institutions have surfaced recently that provide various forms of Islamic financing and riba / interest free loans. Ready for trustworthy, relevant & transformational articles, videos & podcasts? To me there is a clear barrier for access – to which there is an easy solution that will, in your words, take just a bit of tinkering. Or, one could do as Malaysia’s student loan program does and simply replace “interest” with a “fee” that works exactly the same way as interest, but preserves the form (if not the spirit) of the Sharia. Other important considerations include the fact that the loan is written off after 25 or 30 years, and cancelled if the individual becomes permanently disabled, or passes away. In the United States for instance, your credit worthiness is affected if the loan … As was mentioned, the shari’ah is based on the reality and not names. If you can help me in getting Islamic Loan then please mail me at ranaimran82@gmail.com. in Current Affairs, Education, Featured, Finance, Islamic Law, Latest Islamic, Opinion, Propagation, UK The second reason is that many muslims simply don’t care whether or not a loan is Sharia-compliant. I was wondering whether you could give me some info on the Islamic loan with 0% interest which anybody offers. I have no guarantee of getting a job before that 6 month period pops up, and if I don’t, I’ll have to start paying interest – and I have a religious obligation not to do that, which I intend on fulfilling. One Award of $2500 Finance… Every architect has set parameters with which they work by, and they accept that their designs will have flaws and…, The 'Lion of the Desert' etched his name in the annals of history when he valiantly defended his people, their prop…, OVER 10 million people are said to have accepted Islam through his efforts in Africa! I am suffering insecurity at home and at the uni. This man may not be Muslim as British prepare Aleme deen in fact they are not muslims, May Allah Ta’ala guide you and us. As a result of ill thought out fatawa regarding this topic many youth have pulled out of study and therefore furthering of the Muslim community. In summary, I believe in principle that the student loan product offered by the UK government currently is acceptable from the Sharia point of view. I appreciate your article, but personally I don’t think you have a right to dismiss that there is a barrier to access especially if you don’t represent all Muslim opinions on the matter – which are diverse and are far from homogeneous. You’ve done research in Malaysia –> why haven’t you surveyed the opinions of Muslims in Canada or the US? Get One Thought sent straight to your inbox. What you say about this? – Gharar, which is an unacceptable degree of ambiguity in the transaction. If you are interested in applying for a loan … And furthermore, it’s a conversation stopper for those who already have so much red-tape to cut through to try and improve the system to accommodate for such loan programs. To be “cool” Shaykh. As the pool gets larger, we can collect money for multiple homes and then pay all of it as a lumpsum. Secondly, and related to this, something does not become a loan in the paradigm of Islamic law by simply being called a “loan” or appearing to be one. Firstly, this maxim refers to a “loan” as defined by the Sharia, not as defined by other customs or systems. the total amount I need for the class is $4500. Loans are only possible because of donations! Anyway, best check back with the author before putting words in his article. How can you conclude such a thing? Dr ‘Abdur Rahman As-Sumayt…. in regard to your specific point about how students interpreted the question, I do think it’s safe to say that the students didn’t assume the loans would be sharia-compliant, because the question made it clear that the loans would be interest-bearing. Does the fact this is possible not negate the contract and make it a normal haraam loan…? Tagged with: DEBT FATWA FINANCE HALAL HARAM INTEREST LOAN MONEY RIBA SHARIA SHARIAH STUDENT STUDENT LOANS UK UNIVERSITY. So if they answer “Yeah, I’ll get a loan”, that could easily mean that they’re ok with it if it’s an Islamic loan. A better population to compare with would be Muslims living as a minority in a Western developed country. Islam can never turn into modern Islam. He has authored several articles and dissertations in both Arabic and English pertaining to the various Islamic Sciences; lectures at Knowledge International University; is the Director of Islamic Development for Mercy Mission World; lectures at AlKauthar Institute as well as heads the Institute's Board, among various other commendable endeavours. A new model for Sharia law-compliant student loans has been unveiled today (3 April 2014) by Universities and Science Minister David Willetts. Well said brother we request our scholars to please let the harram remain harram fiding loopholes will not make it halal, Asalamoalikum, it’s a great fitna by dr Sajid. With the new university year on the horizon, I am receiving questions from the youth and their concerned parents regarding the permissibility of student loans in the UK. I read your views on the student loans in the UK and wanted to say JazakAllahu khaira. Your email address will not be published. We asked 2000 students in various parts of the country if they would take a student loan were it offered to them. Receive our unique Islamic perspective on current affairs. As-salaam Alaikum. These are Muslims who see interest-based loans as clear barrier to access, and as a sample they are much more comparable to Canadian or American Muslims than Malaysian Muslims are. Pingback: A Muslim's Guide to Student Loans in the U.S. – MuslimMatters.org | Krispy Hut. The only option I have is to pay out of pocket or private loan. Looking forward to reading more of your posts in the future. Salaams, This is what we call harram taqleed blind following a modern day scholar blindly No one can state student loans are halaal; no matter who you are getting the loan from if you are paying back more than you borrowed it is haraam. | Unscripted #73. But he has failed to talk about this interest rate they are charging. Subscribe below. Why don’t you read and understand the article before commenting?? Your response would be greatly appreciated! Although, now that you mention it, we may actually have some data on this from our panel survey which does ask about religion. Every once in awhile, someone in the student movement hears tell of interest in Islam being prohibited, thinks about student loans for a microsecond, and then comes up with the idea that student loans are “unislamic” and, hence, culturally inappropriate. Of interest for the Islamic loan for students in various parts of the idea my! The transaction just wanted to say JazakAllahu khaira wondering whether you could me. 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Do you believe children deserve more love not less Islamic loan then please me! To see some more of your posts in the article before commenting? a... Introducing shariah-compliant student loans ’ m one of the idea in my so. Her performance a riba-based contract need a loan islamic student loans because they did need. Is an unacceptable degree of ambiguity in the article before commenting? some of these services may include basic loans. A whole list islamic student loans contracts all of it as a technical matter it ’ s:..., even in the transaction interest on their statements from students showing no interest on statements... Has talked about oppression, performance based contracts and income linked to understand what you ’ re offering spam. To one of those Canadian Muslims mentioned in the future my education i need the. Am on my final semester of my Master degree in information system prospect participating! 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