Campaigners welcome 2025 introduction date for shariah-compliant alternative student finance

Muslim groups and activists have welcomed the news that shariah-compliant halal student finance could be available in the UK by 2025 — 11 years after it was promised by the government.

Two weeks ago, hopes were raised that Alternative Student Finance (ASF), an Islamic-friendly source of finance, could be introduced in three years after the higher education minister Michelle Donelan was asked a question about it during an Education Select Committee.

Donelan confirmed the government is exploring how ASF can be introduced in tandem with the lifelong loan entitlement (LLE), which replaces the current student loan system in 2025.  

“That is 11 years after it was promised, but if that is the date, at least it is good to know a date,” said MP Ana Firth, who raised the question about ASF during the meeting.  

Back in 2013, the then Prime Minister David Cameron said the government was committed to creating a sharia-compliant alternative student finance product for Muslim students.

Cautious optimism  

In recent months, groups such as Muslims Census, National Zakat Foundation, Islamic Finance Guru, along with student advocate Asha Hassan, have ratcheted the pressure on the government to finally come good on their promise.  

Hasan, who has been a tireless campaigner for halal student finance for many years, is cautiously optimistic about the recent developments.  

“I would have liked to have been done sooner. But practically, in terms of getting things set up, it probably is a realistic timeline,” she told Islam Channel.

“Ultimately, I’m very happy about the firm commitment that they made. Because for the past, 18 months to two years, they’ve seen very vague with statements regarding ASF.

“So, to have a very clear, firm commitment, and hear the intention behind trying to deliver it by 2025 is actually a good thing.

“It shows what this coalition of individuals from Muslim Census, IFG, NZF, yourself [Islam Channel] have done by just speaking up. And doing that in such a short timeframe, we’ve been able to get a firm commitment. So, I’m very pleased about that.”

Hasan said from the meetings she has had with government officials, 2025 seems like an achievable target but the ‘one concern’ she has is that any delays to LLE could also impact ASF.

“Michelle Donelan when I met her, and I quote her directly, she said it’s very doable. It’s not that difficult,” added Hasan.

“I think the pressure we’ve applied through the campaign, through everyone’s efforts over the past year or two have made a really big difference, alhamdulillah.”

She said individuals approaching their local MPs has also helped and she wants the Muslim community to continue to pressure the government so it does not backtrack.

“We have to make sure that we keep this front of mind, we keep the issue alive, people keep sharing their stories, people keep reaching out to their MPs at regular intervals in the next two, three years,” she added.

Reaction from Muslim organisations

FOSIS, the umbrella body of Islamic Societies in the UK, told Islam Channel: “Alhamdulillah, FOSIS is pleased that the government has given us a date for its introduction, something that has never been given despite their many pledges over the past decade.”  

“It is a step in the right direction and we urge the government to continue to consult Muslim students to ensure that their product meets the scholarly backed Shariah compliance needs.”

FOSIS said it is “aware that time is needed for it to start” as it’s happening alongside a major shift in the student loan system.

“However, there are many Muslim students still not being able to access higher education and also those who are struggling to pay their tuition through work during term.

“In the meantime, we ask that University hardship funds to cater beyond just maintenance costs,” it added, saying that more grants, scholarships and interest-free bridging loans should be available to Muslim students.

Muslim organisations and individuals welcomed the news that shariah-compliant student loans could finally be here.

A DfE spokesperson confirmed to Islam Channel that the Government remains committed to delivering ASF and is looking at how to align the product with LLE.

On 6th May 2022, it concluded its consultation on LLE. The department is considering the contributions and will publish its response soon.

The government estimates that the cost of introducing ASF will be around £10 million.

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