University Job Permissibility

Everyday Islamic Finance Business and Career Questions
#1

Salaam,

I am a qualified Accountant and I have a question regarding employment in a University.

I understand the seriousness of avoiding riba based transactions within a Finance function and because of this, I am looking to make a change from my current job.

My question is in regards to the finance function of a University - a lot of these institutions are funded by the Government but if I was to work in the finance department, I assume a large part of my job will be to report on the tuition fees from current and prospective students, many of which would be in the form of a loan.

Although I won’t be part of the actual transaction of students taking loans with the Student Loans Company, is it still permissible for me to be a part of the reporting of this transaction? I would greatly appreciate the Islamic perspective on this before I make a decision.

The kind of work I will be undertaking is budgeting, financial reporting, compiling financial statements etc.

Jazak’Allah khair and I pray Allah makes the path to halal income easy for us. Ameen

#2

Wa alaykum salaam,

We praise your concern for a Halal income. May Allah grant us all Halal income and a pure income. Ameen

Are you just reporting past transactions and payments?

#3

Salaam,

It will be the majority of past transactions in the reporting period (usually 12 months) but we will also be taking into account future payments as the students will be there for the full duration of the degree course, which will be longer than 1 year.

I’ve added below a summary of the role.

Main duties

•Supporting the production of the University and Group financial statements in accordance with UK GAAP, OfS requirements and all other relevant accounting regulations.

•Working closely with the external auditors and internal Finance teams

•Ensuring through out the year a timetable of monthly activity to check the balance sheet is actively managed and issues are identified and resolved in an efficient manner. Closely monitor the reconciliations, processes, responsibilities and documentation, taking action where needed.

•Provide and/ or organise training on balance sheet reconciliations and audit requirements.

•Provide technical accounting advise as required. This may be to support strategic projects or senior management discussions.

•Lead the completion of several regulatory financial returns and smaller funding audits.

•Produce a monthly balance sheet for management reporting and assist with forecasting and variance analysis throughout the year.

•Working with the Capital Accountant, support and improve the capital reporting and forecasting processes.

•Develop corporate financial reporting to make the most effective use of available reporting tools, standardising requirements, automating reports where possible and ensuring adequate control points.

•Actively manage equality, diversity and inclusion through monitoring and evaluation and actively challenging unacceptable behaviour.

•Supports the University’s sustainability agenda through resource efficient working.

•Any other duties commensurate with the grade, including deputising for the Financial Controller.

Apologies for the lengthy reply - I look forward to hearing from you In Shaa Allah.

#4

Assalaamu alaykum,

This role is permissible.

I am assuming that the money received by the university is the financing itself (the capital of the loan given to the student) paid by Student Loans Company on behalf of the student. If that is the case, then this is just the loan. The interest is paid by the student to the student loans company later, which you wouldn’t be a party to?

#5

Wa alaikam salaam,

Yes, that’s correct, the Student Loans Company will pay the University on behalf of the student. I would not be a part of the interest element paid.

Just a question on the interest repayment part - most students attend University using this option, including myself. The loan and interest are paid back by deducting an amount each month from our salaries - what is the ruling on this? If this is how the system in the UK runs and we have no say on how to repay, how does this affect us? Are we still in sin and what is recommended to us?

Jazak’Allah khair for clearing my doubts