Are student loans haram ?

Ever wondered are Student Loans halal in Islam ? 

Assalamu Alaikum dear brothers and sisters

Most of the youngsters have this common goal of getting a degree from a top ranked university and to secure their job position in a highly paid Multinational Corporation. Ever wondered about those Alhamdulillah less fortunate Muslims, who are not only able to finance the tuition fees of those universities but also bound by their Islamic principle of not taking loan which requires them to repay back with interest (Riba). So In this blog Inshallah, I’m going to discuss how do Muslims manage to pay for university?

With rising tuition fees, the options are limited for Muslims who don’t want to use the Student Loans Company. They may try to lower costs by applying for fee waivers, scholarships, hardship schemes, apprenticeships, bursaries, or zakat (charity funds). While some believe that student loans are impermissible, others say that ‘necessity legalises the prohibited’."NECESSITY", if there's a necessity, then only one can take an interest-based loan. 

Now the issue is: what is 'necessity'?

Based on requirement, a matter can fall in one of the 3 categories as per Usul Al-Fiqh.

1. Necessity (Darurat): this means without which you can't live, like - food, clothes and shelter. 
2. Need (Hajat): this means you can live without this, but without this, you will   have inconveniences.
3. Beautification (Tahsiniyat): this only beautifies life. there is no need or necessity of this.
   

Example of 'necessity' is that if you are dying of starvation and you only find pork (pig) to eat, then it becomes halal at that time.

Example of 'need' is - you need a car to go to work if the buses are very crowded and infrequent. So this need makes car insurance (the minimum that is required by law) halal.

 Example of 'beautification' is that you buy a Mercedes-Benz instead of a regular sedan. 

--the above has just set the stage for understanding ---

Now here comes a student loan. Is it 'necessity' or 'need'? The vast majority of scholars will not put this in 'necessity' bucket. Maybe a 'need' on a case-by-case basis.

Now, what type of sin is usury (riba)? This is a major sin.

A major sin can't flip a 'need' from haram to halal.

So by default, this riba will earn him a major sin. But if your case is special and you think higher education is a 'necessity' for you, then talk to a scholar or a knowledgeable imam. Otherwise, it is a sin.

CONCLUSION:  By keeping in mind the above fatwa, I'd conclude that student loans are Haram. So avoid considering student loans not only because it's haram but also because of the debt burden on your head after the completion of your degree. 

That's it from my end, as far as your part is concerned make sure to share and subscribe to my blog and don't forget to comment as this will motivate me to make more blogs. 

Jazakallahu Khair,
Be good towards your parents and remember them as well as my parents in your du'a. 

 

*Note*: If you have any topic regarding any personal or social concerns which you want me to make a blog on and reach to a conclusion as per Islamic principles, drop me an email using the email address given below or else comment in the comment section.  

                                  (mohammedhasnain13hgmail.com)