Mufti Online — Madrasah Ta'leemuddeen

What is the status of permissibility with regard to student loans?

Published as Taking out interest bearing student loans

· 22 Jumada II 1438 AH1 min readEnglish

Question

1. What is the status of permissibility with regard to student loans? Here in Australia, we have the option of paying back all or some of the loan, but it has some form of interest (indexing) applied to it. These loans are usually taken out by university students.

2. What about those who have already taken out a loan and do not wish to pay back? The Australian law requires a re-payment of the loan incrementally in the form of income tax, which only becomes mandatory if and when the debtor is earning above a minimum yearly salary.

Answer

1. Interest is impermissible and haraam.

2. If you are going to be paying back more than you received then this will amount to interest. Try your best not to take the assistance.

And Allah Ta'ala (الله تعالى) knows best.

Answered by
Mufti Ebrahim Salejee (Isipingo Beach)
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Source: Mufti Online — Madrasah Ta'leemuddeen — https://muftionline.co.za/node/19422
Fatawa SA: https://fatawa.co.za/fatwa/muftionline-19422

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