University students in 2026 face what many would see as a perfect storm: the highest student debt burdens in UK history, a stuttering economy and a new 40-year Plan 5 loan system that guarantees decades of salary deductions.
But on top of these financial challenges, one group faces a religious dilemma too.
Islam prohibits paying or receiving interest (riba), with the Quran describing the act as declaring “war on God”, due to the view that money is a means of exchange – not a commodity to be rented for guaranteed profit.
Because of the fact that student loans accrue interest – often well above inflation – many Muslims have had to turn down prestigious opportunities, find other forms of funding, or attempt to justify interest theologically.
But the issue is complex. So complex that a study carried out by the British Board of Islamic Scholars found almost a 50/50 split amongst scholars on the permissibility of student loans.
The board “strongly recommended’” that the Government provide an “alternative finance’’ version of the student loan that would “replace the words that are objectionable to Muslims with words that are neutral”.
For now, prospective students are having to wrestle with the dilemma themselves.
For Amina Benhammouda, 21, being the child of immigrants from a working-class background in Leeds, getting in to Oxford to study law was the ultimate ticket to social mobility.
Amina decided to take out a student loanAfter applying for scholarships and only receiving a small amount, she felt she had no choice but to rely on the Islamic principle of Darurah to take out a loan. This is the allowance of normally prohibited actions in cases of absolute necessity.
She says: “Given my parents’ background and my siblings, I put a lot of responsibility on myself to progress financially and in my career to be able to support my family.
“It’s almost the pressure of: your parents have immigrated here and given you a better life, so why would you not take advantage of all the educational opportunities you have?”
“From an Islamic standpoint, I don’t think they’re too problematic because they are necessary. It’s not like I took the loan out to make a financial gain or to gain capital in any way. If you compare education to other reasons why people take out interest loans, I think it is more morally and religiously justifiable.”
Coming to the end of her degree, she now admits she would perhaps rather have taken an alternative route.
“Had I gotten an offer at a top law firm for an apprenticeship, I absolutely would have taken it instead. When I entered university, things like degree apprenticeships weren’t as advertised as they are now. Not a lot of us had that option when we finished A-levels, or at least it wasn’t as prominent as an option,” she says.
Suleman Ahmed, 21, is someone who took the apprenticeship route. After receiving an offer from Cambridge to study engineering, he saw taking student finance as the only viable way of attending, even though he saw it as “wrong” in religious terms.
But after stumbling upon a degree apprenticeship with Jaguar Land Rover (JLR) in partnership with University of Warwick, Suleman began to rethink his path.
The apprenticeship offered a fully funded degree providing a competitive salary and a guaranteed job. But most importantly, it offered a way to graduate completely debt-free, entirely avoiding the moral burden of riba.
Suddenly, the interest he considered unavoidable was suddenly entirely avoidable.
The decision to reject Cambridge did, however, lead to pushback from peers.
“A lot of the people I spoke to were obviously non-Muslim, so I didn’t really discuss with them the interest problem that was in my head. Some of my teachers would be like, ‘Are you silly? Go to Cambridge!'” he explains.
Even within the Muslim community, he faced a backlash, with peers saying that the UK student loan system did not constitute riba, framing it merely as a graduate tax.
“Some would say that interest is allowed, that riba is [only] excessive interest, whereas some sort of interest on things like the university loan is not prohibited,” he said.
To soften the blow for his baffled teachers and peers, he deferred his Cambridge offer as a “safety net”. Internally, however he had made his decision. By the end of his first year at JLR, studying at Warwick without a penny of debt, he emailed Cambridge to reject his offer.
He now spends his spare time mentoring sixth-formers for free, helping with applications, mock interviews and assessments. His goal is to prove that young Muslims don’t have to choose between their faith and their future.
For Marafie El-Hussain, 22, the path was less straightforward. After securing a place to study maths at Queen Mary University of London, she initially took out a loan.
Marafie El-Hussain initially took out a loan but later changed her mindHowever, this changed when she joined the Islamic Finance Society at university and took an Islamic finance advisory course.
As she learnt more about the concept of interest and Islam’s position on it, she stopped taking out a loan in her second year.
‘’Once I let my parents know that I didn’t know if taking a loan was something I wanted to carry on doing, they were quite open to exploring other options.’’
She was able to continue her studies with financial support from her parents as well as part-time jobs, bypassing the need for a loan. However, she is still sympathetic to those who are reliant on them.
“Islam allows for exceptions in cases of necessity. It becomes a lot more about what is necessary for a person. Everyone makes their own judgment based on their circumstances,” she says.
Now serving as co-president of her university’s Islamic Finance Society, as well as interning at Islamic Finance Guru, a leading Islamic finance hub, she has been able to think more about the alternatives people should take before taking out loans.
She does, however, strongly advise against Muslims completely withdrawing from higher education, due to financial worries.
“If as Muslims we boycott universities, then realistically that leaves a lot of us working retail or low-paying jobs,” she explains.
A spokesperson for the Department for Education said: “We are committed to introducing a system that enables all students to access higher education in a fair way, regardless of their beliefs.
“This reform will follow the January 2027 launch of the Lifelong Learning Entitlement. Once the new flexible loan framework is in place, our priority will be introducing the ASF scheme to ensure inclusive financial support for every student who needs it.”
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