The Independent reports that an organisation representing Muslim students in Britain is protesting against the coalition government's reforms to university finance.
The Federation of Student Islamic Societies (FOSI) warns that young Muslims could be forced to sacrifice higher education as a result of the higher rates of interest under a new university loans system. The Indy's Poppy McPherson writes:
Under some interpretations of Islamic law, the acquisition of loans - particularly those which accrue interest - is forbidden. The new system requires graduates who earn above £21,000 to pay interest levels of up to 3 per cent above inflation. The National Union of Students (NUS) has warned it could be two years before a suitable system is arranged [to accommodate Muslim students].
A FOSI spokesman said:
Under Islamic law interest is seen as something that is prohibited. Previously, the interest rate was at the market rate of inflation. The problem now is that the interest is above the market rate. Because the rate of interest is above the rate of inflation, it is quite blatant usury.
The first point here is also blatant: in Britain, we do not operate under Islamic law. The student finance system has to be devised according to British laws, not those of a religion observed by 3 per cent of the UK population.
Second - and less comforting, but historically apt - thoughout the ages, the spiritual has had to adapt to the temporal (and of course vice-versa). Usury, or the charging of interest of any kind (not necessarily excessive) on a loan, was outlawed by Christian churches for hundreds of years. The first instance of secular law overriding the church was when Henry VIII's parliament passed 'An Acte Agaynst Usurie' in 1545. Islamic banks have already devised a number of methods of rewarding savers, such as entrance into Premium Bonds-style lotteries; or direct investment is encouraged instead of loans.
The third point is most pressing to the present situation of universtiy finances. The Government takes a sizeable hit on the currently interest-free student loan book. The Browne Review identified student loans as a straightforward and fair way of reforming university financing and shifting the burden from the taxpayer to graduates. Removing what was effectively a middle-class subsidy was the right thing to do. The state should not be handing out cash that in some cases will be invested in ISAs or unit trusts, so providing an easy return for students who don't truly need their loans.
The money to finance universities needs to come from somewhere. The nervous fees and funding fudge contrived by coalition ministers means that not enough is going to come from students. HE institutions will still rely for some years to come on direct grants from the state. For the state to afford this, there has to be more of a contribution from those who can afford it most - the graduates earning enough money to pay off their loans, with interest.
One could just charge Muslim students more for their higher education in the first place, and allow them to forego the payment of interest at a later date. The tuition fees policy of the Scottish Government is an example of how the authorities can get away with discriminating against students within the same state without blinking an eyelid.
If Muslim students do not want to pay interest on their student loans because doing so would contravene their faith, then I have some sympathy for them. However, we cannot have a situation in which some graduates end up paying less because they happen to observe a different religion to their peers.
Solutions? The floor is open for comments.
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if the UK allows this then there going to be closing there doors with all the law suit from Non Muslims it would be discriminatory (spacial treatment) for one group then another. and collages are suppose to be separate from religion these Muslims are going to have to do what every one else does deal or don't get a loan
If Muslim students do want to pay interest then they can study in an Islamic country. It will be shame to lose the valuable members of society but alas.
1. don't borrow
2. attend a university in an islamic country
As students prepare to go to University, stories are emerging about Muslim students dropping out of courses, owing to their scriptural aversion to accepting the new above inflation interest bearing loan scheme. Whilst some adherents to the other Abrahamic faiths also eschew interest, it is clear this issue mostly affects Muslim students, who as a British faith group, already have the lowest level of university graduates, and the highest levels of unemployment (2001 census).
As such the government's Department for Business, Innovation and Skills (BIS) have been in discussions with various parties including FOSIS, NUS, 1st Ethical Charitable Trust and Al Qalam Scholar Panel to explore whether it is possible to devise an alternative to the new interest bearing loan based scheme. The goal is that any alternative system would cost a student the same as the conventional student-loan; that is to say whichever system is accessed by the student, equivalent levels of borrowing will entail exactly the same level of repayment over the course of the agreement.
Nabil Ahmed, President of FOSIS, commented, "We are lobbying for an alternative to interest-based loans which should be identically priced and open to all. We believe this to be a key way in which existing inequalities to accessing higher education can be reduced, and we are happy to support BIS in their efforts to develop the same.’