Greensville Trust

“Sacred education is a God given right of each person that begins prior to birth. Our mission is to deliver this inalienable right thereby facilitating our ultimate purpose, to know God.”

    Are we allowed to take out student loans at University?

    Question 07/06/14

    Are we allowed to take out student loans at University?

    Answer By Ustadh Haroon Hanif

    Amongst the most destructive acts for a believer is to engage in any contract that contains interest. Such an act is tantamount to waging war against Allah, Most High, and His Blessed Messenger, prayers and peace be upon him. A believer would never consider having any contact with interest let alone build his life upon interest.


    Consider the following verses from Sura Baqara, verses 275 to 279, where Allah, Most High, says:


    ‘Those who take interest will rise up (on the Day of Resurrection) like someone tormented by Satan’s touch. That is because they say: “Trade and interest are the same,’ but Allah has allowed trade and forbidden interest. Whoever, on receiving Allah’s warning, stops taking interest may keep his past gains – and Allah will be his judge – but whoever goes back to interest will be an inhabitant of the Fire, there to remain. God blights interest but blesses charitable deeds with multiple increase ... You who believe, beware of Allah: give up any outstanding dues from interest, if you are true believers. If you do not, then be warned of war from Allah and His Messenger.’


    Reflect over the severe tone in these verses, reflect over the fate of someone who deals with interest as he is resurrected and reflect over the war that has been declared by Allah against those who consume interest.  


    Consider the verses in Sura Al-Imran, verses 129 to 130, where Allah, Most High, says:


    ‘You who believe, do not consume interest, doubled and redoubled, Be mindful of Allah so that you may prosper – beware of the Fire prepare for the unbelievers.’


    Again reflect over the harsh tone in the verse such that great imam Abu Hanifa, may Allah be pleased with him, considered this verse to be the most terrifying verse in the Qur’an. Reflect over a Fire prepared for unbelievers as the destination of people who consume interest.


     That is the extreme nature of dealing with interest. In light of that, one of the many problems that Muslims face living in a country in which taking interest loans is a fact of life is the problem of student loans. Ever since the government introduced the system of student loans the system was based on inflation based interest, based on which it was viewed as lawful by some. However, in September 2012 the government altered the student loan system by no longer linking the interest to inflation. This then made the system of student loans as undoubtedly prohibited for Muslim students, closing of university education for Muslims.


    At this point it is worth remembering the words of Ghazzali, may Allah be pleased with him, who said: ‘Seeking out the lawful is obligatory on every Muslim. Engaging in worship and seeking knowledge with unlawful nourishment is like building on a garbage heap.’


    Ever since then some scholars have worked on trying to find a lawful alternative that allows Muslims to continue studying at university. At the forefront of this is 1st Ethical who have lead the attempts to find this alternative.


    Whilst working with the government they have managed to come to a compromise, creating an alternative which is acceptable Islamically and satisfies the government requirements. The government has put out a survey asking for views of the Muslim community to determine whether there is a need or not. The deadline for this survey is June 12.


    Greensville Trust requests all who receive this to take some moments to complete the survey and to forward this on to as many as possible encouraging them to complete the survey. When we have an opening for a halal alternative to something which is prohibited to the highest degree it is incumbent upon all Muslims not to remain silent and antipathetic.


    I personally endorse the alternative system.


    Please read the details of the halal student loan system at


    Also watch this video in which a number of teachers and imams have given their support to this



    May Allah bless the scholars and the brothers and sisters who have worked on attempting to provide this lawful alternative.


    Haroon Hanif