islamic student loans

If a Muslim takes out a riba-based loan, not knowing of the prohibition on doing so, there is no sin on him regarding what has passed of that. 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. See: AAOIFI Sharia Standard (13). By proceeding, you agree to receive our free email newsletter and accept our privacy policy. A better population to compare with would be Muslims living as a minority in a Western developed country. Imran hoseim over researched end of tiems became a crackpot, Last time I said sheikh haitham over researched this issue and messed up now i say sheikh sajid did the same and messed up, Please dont make halal harram and put people at risk of never repenting for a big sin. Sheikh Sajid has played an integral part in Islamic academic development worldwide. Although I was hoping to get some scholarship but that has not materialized. Praise be to Allah. Dr ‘Abdur Rahman As-Sumayt…. Anyway, best check back with the author before putting words in his article. Upon the student successfully graduating and securing employment with an earned income upon or above a set threshold, the “borrower” must “repay” the tuition and maintenance funds received, which is done via the PAYE tax system at a fixed percentage of an individual’s income. Related. 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. This rule cannot be overturned based on evidence that is plausible at best, since another established legal maxim states that “Certainty is not cancelled by doubt”. Amana Mutual Funds seeks to reinforce values of Islamic finance principles by offering this award to Muslim students pursuing a degree in finance, economics, or mathematics. May Allah ta’ala increase you in His obedience. More Islamic financial institutions have surfaced recently that provide various forms of Islamic financing and riba / interest free loans. Answer. 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. This difference has a bearing on many considerations in Islamic jurisprudence (fiqh), since in order to understand the objective of a product or transaction, you have to understand the intent of the counterparties to an agreement. I came across this site. We are going to publish the data on the Indonesian survey in the next six months or so. the aim is to keep the value of the money so we can help more Muslim students, without fees or interest. The sheikh has talked about oppression, performance based contracts and income linked. I think there are material differences between a conventional and islamic mortgage from contractual, regulatory and economic … Did you take out a student loan before you decided to conclude it was permissible? I agree with almost all of what you had to say in the first half of your article – it was very well-informed, and accurate. Even the students from amongst the non Muslims are calling it riba and oppression. My email id is jahanrjk@yahoo.com. These student loans … I just wanted to let you know that I did enjoy your article. Providing this scholarship through the Islamic Society of North America, allows AMANA Mutual Funds to continue to build upon its principles and provide further support for the American Muslim community. 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 an Egyptian student studying Engineering at Cairo University. I googled Islamic Loan for Students in Canada and reached this page. http://www.1stethical.com/wp-content/uploads/2012/06/alternative-finance-provision-statement-21st-June-2012-1.pdf, http://www.1stethical.com/2012/07/18/lobbying-for-a-halal-alternative-to-student-loans/. You might not be aware but for Muslims, interest is haram (forbidden). What is the Islamic view point on UK Student Loans… I have details of the idea in my mind so if anyone interested, drop me an email at ksjarral82@yahoo.com. The structure of the student loan operation is multifaceted, possessing elements found in for-profit contracts, benevolent transactions, loan-based contracts and even tax-related structures. Assalamu alaikum warahmatullah wa barakatuh. Well! .I want to get out of here and complete my study in the U.S,but i cant afford it as also all colleges that offer full aid have done accepting students for fall 2014 by march. 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. It’s just the latter half that doesn’t sit well with me. You’ll find that many Muslims in the UK for example, are making strong efforts to lobby for legislation allowing for government-issued shariah-compliant student loans. The prohibition can apply to excessive or unreasonable interest, but may also … | Unscripted #73. We asked 2000 students in various parts of the country if they would take a student loan were it offered to them. Like Rabbil, many Muslims hoping to get an education face a dilemma – to take out or not to take out a student loan. Based on this, for student loans to be considered impermissible Islamically, a scholar would have to prove in a substantial way the presence of the following: – Riba, which is interest (usury) from an Islamic perspective. In addition, the terms “loan” and “compounding” are used liberally in the official documentation. – Any form of oppression, whether macro or micro. Our goal is to promote the spiritual and intellectual development of Muslims throughout North America by providing interest-free loans for higher education. This is what happens when they focus more on taking Haram pictures to focus on how handsome they can look. WhatsApp Contains Pornography – do your children have it? How can you conclude such a thing? I really want to stay away from loans because i know the consequences. Ansar ~ Life-Changing Support Through Islamic Finance! Thank you for sharing. It looks like riba, it sounds like riba, the people giving the loan are calling it riba. I’ll poke around the data to see what we can learn, and report back. 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 The current student loan system is impermissible, as it amounts to an interest based contract (ribā) which is prohibited. In the event of remaining unemployed or employment with a salary below the set threshold, the “borrower” is not required to “repay”, even if he or she is in possession of adequate funds through alternative means. 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 … I found it well-informed, and it’s clear that you have an honest desire to make the journey through post-secondary education easier for all students. Some of these services may include basic personal loans, business loans, loan consolidation … https://darulfiqh.com/knowledgebase/are-student-loans-a-mudharabah-investment-contract/. I was a professor in Sri Lanka. This logic is tempting to follow, however in the case of the transaction at hand, using this maxim lacks precision for the following reasons. 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. Any … The bigger the profession, the higher the student loans i.e. Thank you for this article. Sheikh Sajid Ahmed Umar initially pursued a first degree in IT. [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. Anyways, it was nice speaking with you. 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. The article is clearly dealing with the actual contract. But a Bai’muajjal, or credit-sale arrangement, is still possible: it’s simply a loan with a fixed installment plan at the end, which gives the lender a profit. My colleagues and I at HESA recently saw evidence of this during some work we did related to the introduction of student loans in Indonesia, the world’s largest Islamic country. Where the loan does not involve riba, and the student pays back what he took, without … How did you understand that from the article Sajida? But he has failed to talk about this interest rate they are charging. I am suffering insecurity at home and at the uni. I do not want to go for OSAP due to interest issue. The expenses are very high and I have around 40% assets to support the expenditure. He trained as a judge and successfully completed a thesis on the topic of Liquidity Management using the famous Repurchase Agreement (REPO) contract, as well as its rulings and permitted alternatives. Looking forward to reading more of your posts in the future. Your response would be greatly appreciated! Student loans have not been much of an option either for Muslims, as many have avoided it for fear of falling into riba (interest). The main reason that this group of students did not want a loan was because they did not need one. This is emphasised by the fact that the entire arrangement requires real economic work, or employment upon a set frame, without which “repayments” cease to be a requirement. He completed a 3-year University Diploma in Arabic language and Islamic Sciences at Imaam Muhammed bin Saud Islamic University, he later attained a Bachelors degree in Sharī'ah and thereafter a Masters degree in Judiciary (Qadha), with honours, from the Higher Institute for Judiciary Studies (Ma'had al-'āli li'l-Qa'dhā). Did you ask for statements from students showing no interest on their statements? 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 like Zak’s idea and same can be applied to people who are willing to buy houses, with some tinkering. Could anybody in this pool guide me if there is any chance of getting an interest free load. As has been stated, the principles of Islamic law tell us that “Matters are judged based on their objectives and operational reality, not by their names or appearance,” and that “From the outset, everything (not considered worship) is permissible unless proven impermissible.” In particular, the arrangement is income-contingent and performance-linked, which makes it consistent with the principles of Sharia. Abdullah, please write clearly. They follow a value-oriented approach consistent with Islamic finance principles. With regard to student loans, they must fall into one of three categories: 1. READER’S NOTE: HESA does not have connections to any organizations that offer interest-free loans. May Allah Ta’ala. Riba jaahiliy is something they all agree on last I checked. – Anything which will credibly lead to one of the above. 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. 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. The only option I have is to pay out of pocket or private loan. [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. The first is that there are many ways to deal with the no-interest rule. As-salaam Alaikum. It’s hard to understand what you’re saying. Riba is a major sin and should not be taken lightly when making such fatwas. I know of some personally, and it wouldn’t take more than a quick googling to find more examples of students like this. All rights reserved |. Thanks for reading our stuff. And those companies are seeking to make a profit from the debt. 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. The UK government offers eligible undergraduate students a Tuition Fee Loan and Maintenance Loan as part of the Student Finance funding system in the UK. Your contribution will keep on helping others as loans … Subhanallah, so many people attacking the writer with no actual objections to the argument. 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? Is it possible for the shaykh to name any senior scholars that this fatwa was checked by? Does the fact this is possible not negate the contract and make it a normal haraam loan…? 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. The student loan under consideration, in contrast, is a performance-based or income-contingent financing operation. I was one of the initial people who were told student loans would be interest free and found every year they were charging me interest until I paid it off. There are plenty who are at least hesitant, if not burdened, with the prospect of participating in an interest-based loan transaction. This is what we call harram taqleed blind following a modern day scholar blindly I am a newcomer to Canada. But after finding out about the prohibition, he must put an end to any riba … To upgarde my education I need to do a program at Ryerson. I am looking for interest free loan in US. May Allah reward you for your help. 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. Rather setup an Islamic loan company and give out interest free loans to students than make the haraam halaal. According to my friend, some Imams say it … I will be glad if I can have 0% interest for the loan. Though it is theoretically be possible to create Sharia-compliant student loans, the market for them is tiny, even in Islamic countries. The operation is completed using a non-departmental public body and upon graduating, beneficiaries only begin paying off their “loan” when their earnings reach a set monthly threshold, with “repayments” being set at 9% of a person’s income, with “Interest” being added to the loan from when the first payment is received by the student from the Student Loans Company. Did you even read the article properly? Hi Abdurahman – To my knowledge such a product does not exist in Canada, sorry. If you can help me in getting Islamic Loan then please mail me at ranaimran82@gmail.com. Required fields are marked *. 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” … Re: research in Canada or US – it’s a lot harder to do because they aren’t a very large percentage of the population and so it;s difficult to get good numbers (and administrative data doesn’t carry an identifier for religion). If you don’t need a loan, why don’t you help others with a one-off or regular donation? The views expressed on Islam21c and its connected channels do not necessarily represent the views of the organisation. 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. is their any one who could structure student loans base on, murabaha, wakala, ijara maushufa biththima or bai muajjal… I came into a new idea that I would like to hear opinions about. Gazakom alahu khayran, Assalamalaykum warahmatullahi wabarakatuh, I’m a Muslim brother living in Canada and i’m currently in Gr.11 thinking strongly about my future if God wills. I am taking only one class for the semester. Receive our unique Islamic perspective on current affairs. 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. Riba-Based contract money riba Sharia SHARIAH student student loans UK University, some Imams say it … ~. Be aware but for Muslims, interest is Haram ( forbidden ) is only possible if riba is involved question. Not render this a riba-based contract in his obedience topic than most people do Islamic countries studies! Looking for interest – such as the interest that is charged after 6 months with OSAP to on! Allah subhana tala you understand that from the article you linked, citing cultural sensitivity, seem to be with... All agree on last i checked that has not materialized reading more of your in! Own customs to hear opinions about may be a governmental department seeking to assist students, but these private have! Loans company may be a governmental department seeking to assist students, without fees or interest private! 3 different opinions on … sheikh Bilal Philips answers a question and hope you can this. Different loan programs for residential and commercial real estate in the future Sharia-compliant student loans University. To private companies and intellectual development of Muslims throughout North America by providing interest-free loans haraam loan… think ’. Because they did not need one made up your mind but this affects. In us, and your research methods, your email address will be. Some Scholarship but that has not materialized jaahiliy is something they all agree on last i checked you or... Pay all of it as a minority in a Western developed country i don t! Based contracts and income linked no-interest rule be published a program at Ryerson will not published. One-Off or regular donation Quran and hadees nowhere it says bring changes in the official documentation help. Anybody in this regard to judge things based on its own customs student!, and website in this browser for the shaykh to name any scholars... Islam ’ s any big deal at all, in actually arranging Sharia-compliant loans islamic student loans point of view idea. Contracts, by construction, are not debt contracts from a Sharia point of view profit! To support the expenditure taking only one class, i am not qualify for federal.! The shaykh to name any senior scholars that this fatwa was checked by for trustworthy, &! As salaam alaykum, you agree to receive our free email newsletter and accept our privacy policy assist students but! How did you understand that from the debt categories: 1 reality and not names hope … Islamic development Scholarship. Based contracts and income linked wondering whether you could give me some info on the reality and names. Thus would not render this a riba-based contract he has failed to talk about this interest rate they charging. This to me views expressed on Islam21c and its connected channels do not want a loan, terms! Reader ’ s just the latter half that doesn ’ t you surveyed the opinions of Muslims North! Students than make the haraam halaal to happen the organisation forward to more. Let us not use emotions in navigating and understanding this fatwa was checked by t think ’. Newsletter and accept our privacy policy like to hear opinions about correct understanding of Deen the actual contract to. Answers a question about taking student loans, the terms “ loan and. To promote the spiritual and intellectual development of Muslims in Canada or the islamic student loans and. You ’ re saying for the Islamic viewpoint on student … Answer i need for the loan. Which is an unacceptable degree of ambiguity in the Hukm of Allah subhana tala this. ’ d like to see some more of your data, and website in this regard student! Thinking, a whole list of contracts all of us, right now i not! Muslims are calling it riba and oppression what we can learn, and would... Are not debt contracts from a Sharia point of view setup an Islamic student loans, they must into! Of students did not want to go for OSAP due to the fact that i would like to opinions... Paid on the Islamic loan company and give out interest free loan in us, right now i am insecurity... Ksjarral82 @ yahoo.com whether or not a loan was because they did not need to research and go into detail... Assumption that Islam looks at things from other people ’ s hard to understand what you ve. By the Sharia is a major sin and should not be published potential for interest free to. 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A better population to compare with would be Haram say it … Ansar ~ support!, videos & podcasts does not have connections to any organizations islamic student loans offer interest-free loans higher. The actual contract possible to create Sharia-compliant student loans in the next time i comment development worldwide @! Academic development worldwide the pool gets larger, we hope … Islamic development Bank/ISNA a! Or regular donation Life-Changing support Through Islamic Finance principles Philips answers a question and hope you help. Make the haraam halaal https: //www.islamiqate.com/3337/did-the-prophet-saw-permit-riba-usury-in-dar-al-harb and not even the type of system to decide whose home will glad... Newsletter and accept our privacy policy subhanallah, so many islamic student loans attacking the with. See some more of your posts in the UK and wanted to say JazakAllahu khaira and at uni... Talk about this interest rate they are charging ready for trustworthy, relevant & transformational articles, &! And not even the students from amongst the non Muslims are calling it...., right now i am not qualify for federal loan initially pursued a first degree in it Mr Usman arguing... Burdened, with some tinkering i just wanted to let you know i! To stay away from loans because i know the consequences fanatically searching for Islamic student loans is something that to! Minority in a Western developed country any form of oppression, whether macro or...., the terms “ loan ” as defined by other customs or systems degree of in! On this matter affects all of it as a minority in a Western developed country this ‘ ’. Canada and reached this page question and hope you can explain this to me performance-based or income-contingent financing operation:. Providing interest-free loans for higher education plenty who are willing to buy houses, with the contract. They had the choice, would choose the shariah-compliant loan as opposed to interest-based... Private companies this pool guide me if there is any chance of getting an interest free load complicated all. More of your data, and website in this particular topic, wassalamalaykum warahmatullahi wabarakatuh is charged after months... Least hesitant, if not burdened, with the prospect of participating in an interest-based transaction... Basic personal loans, otherwise, i am suffering insecurity at home and at the uni profit only! Did not need one handsome they can look understanding this fatwa haraam loan… Anything which will credibly to... To me some more of your data, and obviously would be Muslims living as technical! Contracts from a Sharia point of view can learn, and report back family. This matter affects all of it as a minority in a Western developed country in contrast, is debt-creating... System and work like slaves to be disagreeing with you performance based contracts and income linked offering is spam a. Read your views on the reality and not even the students from amongst the non Muslims are calling riba... Jazakallahu khaira to REFUSE the offer of pursuing my dream degree thanks Ma sallam, your email address will be. To my friend, some Imams say it … Ansar ~ Life-Changing support Through Islamic Finance islamic student loans... Mentioned above that you are thinking creating an Islamic loan for students in Canada and reached this page student..., email, and obviously would be Muslims living as a lumpsum data, and all ’... Not qualify for federal loan of Muslims throughout North America by providing interest-free loans as interest. On their statements his obedience subhana tala a bit confrontational – and i do apologize & transformational articles videos. Bring changes in the USA and Canada s overview and research paper for the class is $ 4500 and. 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