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Sharia Student Loans: Will Muslim Students Avoid Paying Interest On Finance For Higher Education?

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http://www.independent.co.uk/student/news/sharia-student-loans-will-muslim-students-avoid-paying-interest-on-finance-for-higher-education-9268079.html

The Government is inviting responses to its consultation on whether or not to introduce a student loan that is compliant with sharia law, amid reports that the UK’s Muslim population is divided on the issue.

It comes after concerns were raised that the existing finance options on offer from the Student Loans Company were unsuitable for Muslims, with sharia law forbidding loans that involve the payment of interest.

Announcing the proposed new sharia-compliant scheme at the start of this month, the universities and science minister David Willetts said the loans would “ensure that anyone with the ability and desire can go to university”.

Under the new plans a special advisory committee would oversee a mutual fund pooling model (takaful), whereby those who have been to university and moved on to well-paid jobs help to pay for those who come along after them.

Funds would be withdrawn from the pool for prospective students, who would later make a series of repayments to pay for future generations.

The repayments would be set at a benchmark rate equivalent to that of conventional student loans, in a bid to alleviate the fears of some commentators that Muslim students would end up receiving a discount rate.

Yet in doing so the Government has been criticised for creating a scheme that is only superficially avoiding interest and hiding it behind the “smokescreen” of a fund pool system.

I have to say this appears to be semantics, although if it is creating a funding pool why should non-muslims be excluded everyone should be given an option over which system they take part in.

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http://www.independent.co.uk/student/news/sharia-student-loans-will-muslim-students-avoid-paying-interest-on-finance-for-higher-education-9268079.html

I have to say this appears to be semantics, although if it is creating a funding pool why should non-muslims be excluded everyone should be given an option over which system they take part in.

Sharia debt instruments are about semantics. Dressing up interest as something else does not change the fact that it is interest. Also a lot of Muslims believe that interest is allowable as long as it is not at an excessive rate of interest.

This loan will be available to anyone who wants it, Muslim or not.

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One aspect of Islam that I truly respect is the avoidance of debt and the principle that there is moral aspect to finance and investment. Everyone should be taught and learn those principles - even if they are unable to live up to them.

But whenever I look at the marketed Sharia saving and "borrowing" instruments, they all look like debt and interest wrapped in meaningless words to me.

There is a degree of honesty, though. Returns on savings are described as "forecast profit" without guarantees.

I have a couple of bonds with Islamic banks under this regime. Bought when they were doing some table-topping rates and when I was gripped by angst over my savings supporting debt based economic lunacy.

My children will be off to university soon and I'm particularly keen that the first major financial transaction of their adults lives not be to take on an outrageous debt. So I'll be looking into this Islamic financing - even if it is purely to make the point to the sprogs that debt is abhorrent.

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Maybe the Islamic attitude to interest is purely semantic, maybe not. But the prohibition on the charging of interest - not excessive interest - was common in Christendom until around the time of the Reformation, when first the Reformers, and later the Catholics, dropped their objections.

I'm sure the fact that Calvin received money from Venetian bankers had nothing to do with it. :)

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What if you take out a normal loan and then convert to Islam?

What if you are a muslim and take out a Sharia one and then convert to atheism?

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What if you take out a normal loan and then convert to Islam?

What if you are a muslim and take out a Sharia one and then convert to atheism?

Well, you know the penalty for Apostasy. It's a bit harsher than most default penalties .

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Ive no doubt during the last 20 years of student loans Muslims have gladly borrowed the money to fund their education, then Dhimmi Dave comes in and panders to the extremists yet again.

The govt. should have one system for everyone instead of creating yet more non jobs and needless discussion, and if they don't like it no doubt Muslim brothers will be there to hand out the cash or they can go back to the Medieval lands to which their families came from to study.

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http://www.independent.co.uk/student/news/sharia-student-loans-will-muslim-students-avoid-paying-interest-on-finance-for-higher-education-9268079.html

I have to say this appears to be semantics, although if it is creating a funding pool why should non-muslims be excluded everyone should be given an option over which system they take part in.

they should all move to scotland.simple.

no tuition fees, no loan.

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True Sharia pays no interest. So, the premise if this thread is wrong.

Sharia banks take in deposits and if you are willing, you may allow the bank to invest the deposit. If the investment grows, then the profits are distributed to the depositor, if the investment fails the depositor loses that investment.

That is as it should be. Risk is shared between borrower and lender. "Interest", in a form of capital gains, only after the investment succeeds, is received.

The definition if usury had been perverted by the bankers. Usury is not excessive interest, what on earth is that! ? Usury is charging people interest before the loan has performed, and also after the loan has completely failed. Usury is debt slavery.

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