Repaying student loan or not

As-salamu alaykum
Hope you are in the best of health InshaAllah.
I read on your website about student loan.
When I started university I didn’t understand the severity of interest and student loan etc . I have been doing more research on it and have realised how bad it is. I’m onto my 3rd year and next year will be my 4th . However I’m dropping out because I do not want to take part in something with riba involved.

But my concern now is my student loan altogether accumulates to £40000 plus interest (which i was unaware that it accumulates from the first installment) from before .

  1. I thought about returning all the money altogether from borrowing off people and then returning they’re money to them by working . To avoid alot of interest . However thats not possible because it would be hard to arrange that money or even get people to lend that much .
  2. I am most likely not going to earn above the threshold due to only have a level 5 qualification and I work in childcare .
    Should I pay back the money although I may not earn that much ? Or go above the requirement of the threshold

Should I try to pay it in a big chunk ? But by then it would just add on and on until i cant even pay that

I am just bothered about the fact that will be I be sinning for not paying it back ?
But then it is also sinning for paying into interest . I am confused

Jazāk Allāhu Khayran

I am also in the same situation and would like to know what the muftis think about this.


Wa alaykum salaam,

I acknowledge your difficult situation and current predicament.

The issue with student loans is not straightforward as we are talking about getting interest-based finance for university education. We can only discuss finance part once we’ve framed and conceptualised university education.

Therefore, there are three things to consider:

  1. University education
  2. Student loans
  3. When & how to payback

University education

The vast majority of education is useful, has utility and is beneficial for oneself and others. Some forms of education are either discouraged or impermissible from an Islamic perspective. For example, Imam Nawawi and others state that learning witchcraft and sorcery is prohibited. However, Ibn Abidin and Ibn Hajar Haytami narrate some views of scholars who felt even witchcraft depends on the intention and that if studied to repel harm or to be aware of what the evil people do, it is permissible.

In principle, we learn that whatever is beneficial is encouraged; whatever is harmful, depending on the degree of harm and impact it has on one’s faith, it is discouraged or outrightly prohibited.

There is definitely a hierarchy in terms of what is the best subject. Imam Dhahabi ranked medicine second after the knowledge of Shariah. We understand that the value and worth of a particular type of education and knowledge depends on how beneficial it is in this life and the next. Knowledge of Shariah is the most beneficial as it is eternally beneficial. Thereafter, whatever is most beneficial for the world and brings most benefit to the people. I believe that this depends on several factors now and it is very difficult to rank education as everything has relative benefit and one type of knowledge is more needed at times than others. So as a first point, most of education is valuable and can be considered as encouraged by Islam as it brings benefit to the people. Further, the value of a particular study can multiply depending on one’s intention. For example, a lawful and valid intention is to seek a career. This is rewarding also. However, to study and seek education to want to serve humanity and bring benefit to others generally, is more rewarding and praiseworthy. But, to study to want to serve Da’wah and calling towards Islam in particular is the most praiseworthy intention.

There are various subjective views on the value and worth of university education. It’s hard to generalise as not every degree is the same, not every university is the same, not every experience is the same and most certainly, everyone’s socio-economic status is different. You cannot generalise with so many nuances and variances in such a sensitive subject.So whilst respecting and appreciating different arguments, my personal thoughts are as follows:

The manner in which Asim Qureshi, the CEO of Jibble described university courses really resonated with me and it was something I was leaning towards long before but could not articulate it in the manner Asim did. He said in a LinkedIn post:

"The reality is that most people don’t do degrees to fulfill a passion - they do it to get jobs and make money - let’s be honest.

And at a time where degrees are being questioned, I believe for most, degrees are still massively useful - in that they are passports in a world that will need more time to see beyond them."

So two points which really stand out for me are:

  1. Seeking a career
  2. Passports

Most people want to excel and get a high-paying job. That is totally fine and in fact in line with Islamic guidance. The Prophet (peace be upon him) encouraged us to seek halal and lawful wealth.

But the second point is crucial, university degrees are like passports; in many instances, you need them to get to a particular role/career.

Having said that, not every degree is necessary for a career in a particular field. There are many careers which can be embarked on without university education. These careers have alternative industry qualifications which are just as good if not better.

Further, university education is not always necessary to get wealthy or be beneficial. University education is more for a particular career or specific role a person seeks to achieve.

Further, university education allows Muslims in a minority to excel and stand out. We need representation more than ever in various sectors and industries. As a nation, we can only excel if we are an educated community which guides and benefits others. Some degrees are not only beneficial for Muslim representation, they actually serve us and allows Muslims to be served by Muslims in sensitive scenarios.

So to summarise, education is praiseworthy and its value increases with noble intentions. Seeking a career is absolutely fine but degrees are passports in essence and part of a journey. They are not the only route, there are many other routes for a particular career.

2. Student loans

A student finance guide reads:

‘You have to register at your university or college before we can make your first payment. You’ll usually do this in the first week of your course and you may have to take along your Student Finance Entitlement letter. Your university or college will let us know you’ve registered and we’ll make your payment.’

When a student registers for a course, the university is due a payment. The student can either pay or opt for student finance. If he selects student finance, the student finance will make the payment. The exact interpretations depend on whether the Student Loans Company (SLC) is legally liable to pay the university or it merely acts on behalf of the student without any legal duty on them.

  1. If the university makes the Student Loans Company liable to pay and it forgoes the liability from the student, the scheme can be considered a Hawalah (debt transfer).
    Hawalah is defined as a contract through which the liability for the settlement of a debt is transferred from a principal debtor (muheel) to a transferee (muhaal alaihi). When a valid hawalah is concluded, the debt is no longer demanded from the principal debtor. The three effects of a hawalah contract are:
  1. the transfer of a debt and the liability for its payment from the principal debtor to the transferee,
  2. the release of the principal debtor from debt and liability, and
  3. The resulting right of the creditor to claim the debt from the transferee.
  1. If the SLC agrees to pay on behalf of the student, this will be a simple Wakalah (agency) and a loan to the student.

In both the Hawalah and Wakalam-cum-Qardh structures, a loan is extended and any increment in repayment is interest. However, unlike other loans where repayment is more likely, student loans are different because:

  1. The repayment is not guaranteed and is conditional
  2. Neither is the full repayment above the principal loan amount certain
  3. The debt is waived after a certain number of years
  4. Upon death, the loan is waived

From a Fiqh perspective, it is a Qardh (loan) with a Shart Fasid (irregular clause) of repaying an excess in the form of interest. In Tabarru’ contracts, an irregular clause is considered laghw (meaning it does not have legal effect at present) although the clause will be impermissible to stipulate nevertheless. Interest is charged.

In terms of getting a student loan, there are Shariah considerations and commercial considerations. In regard to the Shariah considerations, one should:

  1. Save oneself (or one’s parents) should save for the education
  2. Work and pay if possible
  3. Seek bursaries and scholarships
  4. Apply for Zakat funding
  5. Get a halal interest-free loan

If none of the above is possible, Shaykh Abdur Raheem Limbada gives a fatwa on what to do if the above are not possible. His fatwa can be seen here:

The commercial arguments against student loans can be seen here by Mohsin and Ibrahim:

3. Repaying student loans

If one has the financial means to pay off a loan and will not be put under any difficult scenario, one should pay off the loan. If the repayment of the entire amount is not possible, then one may adhere to the current plan the creditor permits for repayment.

I would encourage students who take the loan to do Istighfar and seek Allah’s forgiveness. This issue is an extremely perplexed matter and due to the lack of alternatives, it becomes all the more confusing and unclear. Try your best to acquire alternative financing or if you are student, advocate and work hard for there to be a Sharia compliant alternative for others. That will be a huge service.

Allah knows best


Jzk khayr @Mufti_Faraz_Adam - really useful answer.

Please do watch the video @Abedaahmed - avoiding a student loan is inshAllah genuinely not as difficult as it might first appear.


JazakAllah Khair for the amazing answer @Mufti_Faraz_Adam
One follow up please (also for @ibrahimkhan)

I think a key bit in the initial post is

I’m onto my 3rd year and next year will be my 4th . However I’m dropping out because I do not want to take part in something with riba involved.

In this particular instance, if the student drops out, I fear that will hamper their ability to get out of the £40k debt + interest already. Most of the valuable suggestions revolve around avoiding student loans altogether from the beginning.

Is there supplementary guidance in the case of realization after sinking into student loans already?

My 2p suggestion for @Abedaahmed, @RJRJ would be to

  1. Get serious (I’ll explain at end)
  2. Pick 1 high income generating skill and start freelancing (e.g. on Upwork) or get a part-time job that you can manage alongside university to start putting in some money into the system. Doesn’t matter how big/small. Just start the ball rolling. Every mountain can be climbed.
  3. Focus and work hard on the degree to get good results e.g. 2:1/high GPA etc
  4. Complete the degree, invest in your CV, go to the student career centre, hone your interview skills, apply for placements, apply for internships, apply for jobs
  5. Reduce the distractions/entertainment/social media (this one is because I see it genuinly hampering Uni/Students I know from doing all the above. It is so easy to waste hours scrolling through a feed.)
  6. Circling back to Step 1. Get serious. I could suggest books like Deep Work but I think the post is segwaying. I’ve been a student, gone through the serious transition myself, come across other students at various stages in their journeys. At some point, someone decides enough is enough. They remove the distractions and reduce the chill/idle time. Start focusing energies. A few months after serious mode is switched on, the difference between them and the non-serious is apparent.



I don’t think it’s wise dropping out now. Complete it, considering that Shaykh Abdur Raheem Limbada permits taking out a student loan in circumstances.

So finish off your degree, but take this as a learning opportunity and as I said, use your skills and knowledge seriously to give back to the community and support Islam and Muslims. Of course, also seek a good, high paying job with your degree. We need financial stability. Without financial stability, you cannot be effective in anything else.


Jazakallah Khayr for your response.
So what I’ve understood and have planned is :

  • I will continue studying as it is my last year . Which will be funded by myself
  • While I’m in my last year I will also try saving up to start to pay off my student loan even if its by small or big amount

Although , it is on the contract that I only have to pay if i earn above the threshold. As a muslim my intentions should be to return back the money as soon as possible right ? And If I have savings for other things such as marriage is it a problem that I save that money instead of saving for student finance

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JazakAllah Khayr for the suggestions , I will be continuing to study by self funding . And Will start saving up to remove the debt asap . InshaAllah.

Keep me in your duas everyone .


May Allah swt facilitate this for you, ameen.

If you take one step towards Allah swt, He will take ten towards you.



I wanted to start a petition online regarding this. I have been thinking of this for a long time and having taken the loan out for my own studies I have always felt guilty. But I want to do something about it. I wanted to use the Muslim student voice as a whole in a petition to get the interest waived and reduce tuition fees. These are points I think which are valid:

  1. Interest is forbidden in Islam and this belief should be honored as there are many Muslims (we form a large part of the student populace and the UK economy is missing out on talent for every Muslim who decides not to go university)
  2. Many graduates are unemployed after they get a degree which means a degree doesn’t guarantee financial stability. If anything this generation has suffered the most at the high tuition fee (elitist). Essentially we are paying more for something which has not lived up to its value
  3. The link between having a debt which grows and the mental health implications this has on the individual
  4. Many Muslims limit there career options after graduating because they want to earn below the threshold required before interest is charged
  5. This is a personal as well as a community issue. It is immoral to make education into a capitalist venture, many students applied to university at a age where they either didn’t know which choice to make or were coerced by parents/teachers and were at an impressionable age where they thought higher education would give them financial stability. Statistics show this isn’t the case and so we need compensation for the fact that higher education doesn’t pay off.

Are these points viable ?


Wa alaykum salaam

I understand your points on interest. However if you were to campaign on waiving your interest based on religion, I believe this would be in violation of the Equalities Act in the UK that states that nobody should be discriminated based on their religion. This would include waiving interest for Muslims only purely because of our belief.

However if you mean to campaign to waive tuition fees altogether, that’s great! Maybe join the labour party and campaign from that base- I am a member and Labour have long pledged to abolish/reduce tuition fees if they are elected (although I am not aware of the current labour leader Sir Keir Starmer’s point of view).

I would also counter your 5th point. It is not true that a degree does not offer greater financial stability. Statistics show that on average a graduate earns £10,000 more per year than a non-graduate, and that their employment rate is higher. Please see here

I agree with anecdotal evidence, I do know of Muslims who graduate in a field that they have been coerced to study simply to have a status of a graduate, then struggle to find related employment afterwards. However, this does not apply in general. I believe the majority of students in the UK choose freely to study for a degree. Apprenticeships/vocational courses are available alternatives too, and many in the UK do choose this pathway (275,000 in 2019/20 academic year)


Wa alaikum salaam,

The government is aware of this, I believe it was David Cameron who launched a consultation over alternative student finance; if you search for this, you should find the government report which is from 2014 I think. They formally added this to legislation (Higher Education and Research Act 2017) but they haven’t actually come up with the specific mechanisms yet :frowning:

APPG on Islamic Finance / British Muslims would be interested in this, I suppose we need to lobby those MPs to lobby the government/DfE to get a move on!

That’s very interesting, I wasn’t aware of this. Thanks for sharing. David Cameron was more inclusive in his policies, sadly it doesn’t seem that the current government follows the same philosophy. Insha Allah something better may exist in the future. As you rightly say, we should lobby our MPs.

I asked my MP about following up on this matter since I haven’t read any updates from the gov about it. Here’s the response from a gov minister;

We have carried out work with the Islamic Finance Council UK on an ASF product
for tuition fee and living cost support, compatible with Islamic finance principles.
We have also published information on ASF, most recently a research report in
May 2019, on the views of current and potential Muslim Students towards student
finance and their decisions on higher education. This report can be found on the
GOV.UK website at:
Information on non-repayable student finance, for example Childcare Grants,
Adult Dependent Grants and Disabled Students’ Allowances is available on the
GOV.UK website at:
Many universities also offer bursary and scholarship schemes as part of their
access and participation programmes, more information for which will be available
on the relevant university websites. Universities also offer non-repayable
payments to those suffering financial hardship, available from the universities
themselves. More information on this support is available on the GOV.UK website
The implementation of ASF is currently being considered alongside the current
Review of Post-18 Education and Funding. The interim report of that review was
published on 21 January and is available on the GOV.UK website at: The review is due to conclude alongside the next multiyear spending review, we will provide an update on ASF at that time.