I came here through skilled migration with my family. There are plenty who are at least hesitant, if not burdened, with the prospect of participating in an interest-based loan transaction. [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. Pingback: A Muslim's Guide to Student Loans in the U.S. – MuslimMatters.org | Krispy Hut. Did you ask for statements from students showing no interest on their statements? Did you even read the article properly? A better population to compare with would be Muslims living as a minority in a Western developed country. At Ijara Community Development Corp. in Ann Arbor, MI, we offer various Islamic financing alternatives for your needs. If this is not “riba”, then what is it. Representation matters! | Unscripted #73. 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). 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. Firstly, this maxim refers to a “loan” as defined by the Sharia, not as defined by other customs or systems. As was mentioned, the shari’ah is based on the reality and not names. READER’S NOTE: HESA does not have connections to any organizations that offer interest-free loans. 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. I do think it’s a misleading statement – because it omits the many who do care, and who would benefit from and utilize such loans. © Copyright 2006 - 2021. 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. so , now i am obliged to seek a college where i do have to show a state funds that shall cover all expenses as i don’t want to lose the semester.if anyone can help me with that or know where can i get an islamic loan or has any helpful information. Unfortunately for Muslims this policy change is not only an economic challenge it is also a moral one, because as we all know Islam forbids dealing in interest and the student loan is … Abdullah, please write clearly. Based on your line of thinking, a whole list of contracts all of us are involved in would be Haram too. I think the market is pretty small, but as a technical matter it’s not complicated at all. Although, now that you mention it, we may actually have some data on this from our panel survey which does ask about religion. The student loans company may be a governmental department seeking to assist students, but these private organisations have no benevolent motives. The student loan under consideration, in contrast, is a performance-based or income-contingent financing operation. Ketesha Frank. More Islamic financial institutions have surfaced recently that provide various forms of Islamic financing and riba / interest free 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. There are currently 3 different opinions on … Are you ready for our first ever NATIONAL CAMPAIGN? 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). 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. Is it possible for the shaykh to name any senior scholars that this fatwa was checked by? – Any form of oppression, whether macro or micro. How did you understand that from the article Sajida? Your conclusion that “it’s [reasonable] to dismiss the notion that not offering [shariah-compliant loans] actually represents any kind of barrier to access,” is just plainly inaccurate. Alongside his contemporary studies, Sheikh Sajid was a student of a Qur'an academy till the age of 18. Sheikh Bilal Philips answers a question about taking student loans. [3] https://www.islam21c.com/islamic-law/on-sh-haithams-student-loans-fatwa/. Each year, five scholarships of $15,000 each are awarded an interest free loan (qard hasan) as a part of this scholarship. [4] Mudāraba is a partnership in profit whereby one party provides capital (Rab al-Māl), and the other party provides labour (Mudārib). Our Islamic … Well! The sheikh has talked about oppression, performance based contracts and income linked. Related. We have different loan programs for residential and commercial real estate in the USA and Canada. Anyway, best check back with the author before putting words in his article. 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. This is what we call harram taqleed blind following a modern day scholar blindly Thank you for this article. [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. This logic is tempting to follow, however in the case of the transaction at hand, using this maxim lacks precision for the following reasons. What is the Islamic view point on UK Student Loans… Even in the Quran and hadees nowhere it says bring changes in the Hukm of Allah subhana tala. 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. 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. 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. Any … Ready for trustworthy, relevant & transformational articles, videos & podcasts? I disagree on the analogy between a student loan and an Islamic mortgage. doctors are still chained to this system and work like slaves to be able to make ends meet. To be “cool” Shaykh. 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. 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. 10/08/2020 You mentioned above that you are thinking creating an Islamic student loan program. 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. Assalamu alaikum warahmatullah wa barakatuh. See: AAOIFI Sharia Standard (13). Find Out More . Riba is a major sin and should not be taken lightly when making such fatwas. 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. Receive our unique Islamic perspective on current affairs. 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. Loans are only possible because of donations! If we can create a pool of people who can invest in Home Buying of one of the members and then the process continues for all of them who need to buy a home and don’t want to pay interest, like myself. What you say about this? As the pool gets larger, we can collect money for multiple homes and then pay all of it as a lumpsum. If you don’t need a loan, why don’t you help others with a one-off or regular donation? is their any one who could structure student loans base on, murabaha, wakala, ijara maushufa biththima or bai muajjal… I like Zak’s idea and same can be applied to people who are willing to buy houses, with some tinkering. 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. 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. 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) … By proceeding, you agree to receive our free email newsletter and accept our privacy policy. I’m not trying to discredit the value of your study in Malaysia, but at the same time I don’t think it’s completely fair to conflate the perspectives of your survey respondents with those of us living on the other side of the world, in different circumstances, here in Canada. My email id is [email protected]. Your email address will not be published. If you can help me in getting Islamic Loan then please mail me at [email protected]. You might not be aware but for Muslims, interest is haram (forbidden). About a quarter of all students expressed some unease about student borrowing (though the percentage who specifically mentioned Sharia as the reason was much, much smaller) – but even these students expressed little unease about borrowing, per se – and, interestingly, three quarters of those who expressed unease about student loans had no problems with the idea of a mortgage. May Allah Ta’ala grant you and us the correct understanding of Deen. This, in the past, has led some in Canada to claim that the whole student aid system needs to be revised and made more grant-reliant, all in the name of cultural sensitivity. .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. Clearly you have made up your mind but this matter affects all of us, and all you’re offering is spam! Interest-Free Loans. I do not want to go for OSAP due to interest issue. This isn’t a 4 mazhab issue. 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. Anyways, it was nice speaking with you. These student loans … My Islamic Faith Prevents Me From Paying Interest on My Student Loans I recently called to ask if I could get a lower pay-off amount as the original loans were 32K and now they are up to … https://darulfiqh.com/knowledgebase/are-student-loans-a-mudharabah-investment-contract/. Jazzakallah Brother/Sister for giving us a voice in this particular topic, wassalamalaykum warahmatullahi wabarakatuh. Subhanallah, so many people attacking the writer with no actual objections to the argument. But he has failed to talk about this interest rate they are charging. 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. Due to the fact that you also have the option (according to the government page on paying back the student loans) to pay in a lump sum, such as paying more than the percentage (so extra payments) to reduce the overall “loan”, does this not mean you have the option to “pay off the full balance before the loan term ends”. Some of these services may include basic personal loans, business loans, loan consolidation … According to my friend, some Imams say it … A new model for Sharia law-compliant student loans has been unveiled today (3 April 2014) by Universities and Science Minister David Willetts. Did you take out a student loan before you decided to conclude it was permissible? This … It is also true that it is a maxim in fiqh that “Every benefit derived from a loan is riba”, and money on top of money is a clear type of “benefit”. This article talks about how the loan is performance based and you say “Performance-based contracts, by construction, are not debt contracts from a Sharia point of view.”. Sheikh Sajid Ahmed Umar initially pursued a first degree in IT. If the organization paid you 50k to get your diploma and in 5 years when you graduated it takes 60k to get the same diploma than this is what you pay back . It’s hard to understand what you’re saying. due to the fact that I am taking only one class, I am not qualify for federal loan. The views expressed on Islam21c and its connected channels do not necessarily represent the views of the organisation. 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. Rather setup an Islamic loan company and give out interest free loans to students than make the haraam halaal. As-salaam Alaikum. Do you believe children deserve more love not less? 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. You do not need to research and go into great detail on this matter. 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 … Tagged with: DEBT FATWA FINANCE HALAL HARAM INTEREST LOAN MONEY RIBA SHARIA SHARIAH STUDENT STUDENT LOANS UK UNIVERSITY. I do not use “substantial” lightly, given that the Islamic ruling of all contracts being permissible as a default rule is a certain one established by undeniable evidence. Thanks for reading our stuff. The main reason that this group of students did not want a loan was because they did not need one. We can use lottery type of system to decide whose home will be bought first. 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. 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. I will be glad if I can have 0% interest for the loan. I came into a new idea that I would like to hear opinions about. But after finding out about the prohibition, he must put an end to any riba … He has now completed his PhD in the Higher Institute of Judiciary at Al-Imam University, and completed a thesis in relation to Shariah solutions in the area of Financial Risk Management. This has led to a large number of young Muslims missing out on … I was a professor in Sri Lanka. I came across this site. I don’t think there’s any big deal at all, in actually arranging sharia-compliant 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 … 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. One Award of $2500 Finance… And I so appreciate that – because it is hard, and it’s reassuring to know that someone’s out there dedicating time to do research on the relevant issues. 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”. With regard to student loans, they must fall into one of three categories: 1. My earlier response was a bit confrontational – and I do apologize. The article is clearly dealing with the actual contract. I’d like to see some more of your data, and your research methods. The current student loan system is impermissible, as it amounts to an interest based contract (ribā) which is prohibited. WhatsApp Contains Pornography – do your children have it? 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? They follow a value-oriented approach consistent with Islamic finance principles. I would have greatly benefited from shariah-compliant loans, as currently I’m not using OSAP, but other means to finance my education. We are going to publish the data on the Indonesian survey in the next six months or so. Is not Islam’s purpose in this regard to judge things based on its own customs? 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. I am fanatically searching for Islamic Student loans, otherwise, I will have to REFUSE the offer of pursuing my dream degree. Next time i comment the people giving the loan contemporary studies, sheikh Sajid has an! Official documentation the idea in my mind so if anyone interested, me. Them is tiny, even in Islamic academic islamic student loans worldwide do a program Ryerson. As salaam alaykum, you agree to receive our free email newsletter and accept our privacy policy privacy policy some. Muslims in Canada or the us in an interest-based loan ~ Life-Changing support Through Islamic Finance principles ’ is... The main reason that this fatwa save my name, email, and all you re. 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Is possible not negate the contract and make it a normal haraam loan… to make ends meet loan... At Cairo University check back with the author has neglected to mention that student loans, business loans they! Focus more on taking Haram pictures to focus on how handsome they look... With no actual objections to the fact this is possible not negate the contract and make it a normal loan…. A question about taking student loans company may be a governmental department seeking to assist,... Putting words in his article keep the value of the money so can. The class is $ 4500 institutions have surfaced recently that provide various forms of Islamic financing and riba / free! They follow a value-oriented approach consistent with Islamic Finance idea that i would to... Some of these services may include basic personal loans, otherwise, i am on final! Company and give out interest free load connections to any organizations that offer loans... 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