Muslim challenge to tuition fee interest charges

By Sean Coughlan
BBC News education correspondent

image captionStudents staged an occupation in Goldsmiths, University of London, against tuition fee rises

Muslim student leaders say changes to tuition fees in England could breach Islamic rules on finance, which do not permit interest charges.

The coalition government's plans to raise tuition fees to up to £9,000 also include higher interest rates for repayments of loans.

The Federation of Student Islamic Societies says this will make loans unusable for many Muslim students.

A government spokesman said these were "not commercial loans".

As well as raising tuition fees, the proposals for university funding include changes to loan repayments - with some students set to pay more than at present.

Interest charges

Repayments will be structured so that higher-earning graduates are paying higher levels of interest rates, up to 3% above inflation.

Only those who earn below £21,000 will remain paying an effective zero rate of interest.

There are concerns that such interest charges are against Muslim teaching on finance and will prevent young Muslims from getting the finance needed to go to university.

"Many Muslim students are averse to interest due to teachings in the Islamic faith - such interest derails accessibility to higher education," says Nabil Ahmed, president of the FOSIS student group.

According to FOSIS, changes to interest rates on loans "ignore the sensitivities of many Muslim students and greatly restrict their accessibility to higher education".

There are different opinions within the Muslim community about whether such loans are acceptable under their faith - but Mr Ahmed says a "significant number" would be opposed.


A spokesman for the Business, Innovation and Skills department said student loans were not a form of commercial lending.

"The government heavily subsidises the student support system and will continue to do so - it does not, and will not in the future, make a profit from student support," said the spokesman.

Mr Ahmed says there is a wider principle about the raising of interest rates and increasing debt for students, which he describes as "unethical".

"People are already drowning in debt," he says. "We don't want people to be priced out of university."

Under the government's proposals, the loans to pay for the increased cost of university will be paid off over 30 years.

Mr Ahmed highlighted how this debt would stretch across generations.

Many students will be in their fifties when they finish paying for their degree courses - at which point they might then be expected to support their own children at university.

The government's plans for university finance, presented to the House of Commons on Wednesday, prompted an occupation by students at Goldsmiths, University of London.

Student union leaders have warned of further protests, particularly against Liberal Democrat MPs accused of failing to keep promises that they would oppose any increase in fees.

But the government has defended the plans as "progressive" - arguing that it will make universities more affordable to poorer students.

Liberal Democrat leader, Nick Clegg, said: "Our reforms will give our universities financial stability and the resources to provide a world-class education in an increasingly global market.

"Graduates will pay less each month than they do now. Part-time students will no longer be faced with unfair, upfront fees. And the poorest graduates will pay considerably less than they do today."

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