Are Student Loans Like An Investment, And So Permissible?

Question:

Assalamualaikum warahmatullahi wabarakatuh.
I live in the UK and I need an explanation about Student loans. I have researched into it, and it seems like it is haram due to interest. However, one of my friend’s imams said it was halal as it was an investment. Is the imam right or wrong and will it be sinful for my friend to follow his imam?

Answer:

Wa ‘alaykum assalam wa rahamtullah wa barakatuh.

I pray are well.

No, the current form of student loans in the UK is not permissible. Labeling them as an investment does not change the fundamental nature of the contract, which is interest-based and impermissible. I don’t believe it would be permissible to take that other position.

Please refer to this answer for more details, context, and potential solutions. This is a difficult test for many. It is a means for them to be raised higher than they would be without it. Don’t lose sight of that. Ask Allah for a solution. He will give you what is best for you.

May Allah grant you the best of both worlds.
[Shaykh] Abdul-Rahim

Checked and Approved by Shaykh Faraz Rabbani

Shaykh Abdul-Rahim Reasat began his studies in Arabic Grammar and Morphology in 2005. After graduating with a degree in English and History he moved to Damascus in 2007 where, for 18 months, he studied with many erudite scholars. In late 2008 he moved to Amman, Jordan, where he continued his studies for the next six years in Sacred Law (fiqh), legal theory (Usul al-fiqh), theology, hadith methodology, hadith commentary, and Logic. He was also given licenses of mastery in the science of Quranic recital and he was able to study an extensive curriculum of Quranic sciences, tafsir, Arabic grammar, and Arabic eloquence.