Studying in UK

[Salahuddiin]

Someone with EU-nationality wants to study in some uni in UK. Now I have few questions regarding the loan for paying the fees. I read, that it's possible to get a loan from UK gov that covers all the fees, but is there riba involved? From somewhere I heard that it's riba-free, but it's real hard for me to imagine that they would loan money without interest.

My second question is about paying the loan back. I read that only after the student graduates and finds a job and starts earning certain amount of money, he'd have to start paying back. Now my question is how is that controlled and done? Let's say someone from another country comes and gets the loan and studies in uni and goes back to his own country. Maybe he's unemployed for the next 20 years or if he gets the job he doesn't want to pay back. Now what UK gov can do?

[Executive]

Salaam bro, Yes its Riba based, they say its interest free because you pay back principle amount + inflation. It is still riba.

Your second question, im not sure but if you are from EU it wont be hard for them to track you down.

[Firefly]

All EU students can get a loan to cover the costs of their studies, but that's only for undergraduate studies only I think. They will have to start paying it back once they complete their studies and start work. Their annual income has to be over £15.000 and this only applies if they decide to stay in the UK, but if they decide to move to another EU country, then it will be just over the minimum annual income for that EU country. I'm not sure about Non EU countries. Also, at the moment there are a lot of changes taking place regarding university fees with the new government and all. About repayments, I know UK residents who have completed their studies here, and left without repaying loans. They just legged it.

It is riba, you will be charged interest, but it's not much and they say it's just the rate of inflation.

[Salahuddiin]

Executive and Firefly

Thank you for your answers, they were very helpful. So it was only a baseless rumor that the loan would be interest-free. How are the maryooley in UK usually do this, just take the loan and repay it with riba, or try to save up and relatives help out with the rest?

Salaam bro, Yes its Riba based, they say its interest free because you pay back principle amount + inflation. It is still riba.

Your second question, im not sure but if you are from EU it wont be hard for them to track you down.

Wa calaikum as salam bro. Yeah it would be easy to track down people in EU, but I don't think they really could do much because of unpaid loan of few thousand pounds. What can they do to people living in another country? Or is the co-operation between EU-states so strong in even these kind of small and insignificant matters? I'm really interested to know how this works, because there must be some ways for them to be sure that the loans will be repayed.

All EU students can get a loan to cover the costs of their studies, but that's only for undergraduate studies only I think. They will have to start paying it back once they complete their studies and start work. Their annual income has to be over £15.000 and this only applies if they decide to stay in the UK, but if they decide to move to another EU country, then it will be just over the minimum annual income for that EU country. I'm not sure about Non EU countries. Also, at the moment there are a lot of changes taking place regarding university fees with the new government and all. About repayments, I know UK residents who have completed their studies here, and left without repaying loans. They just legged it.

It is riba, you will be charged interest, but it's not much and they say it's just the rate of inflation.

You know what happened to those who left? Nothing? I guess that if one day they decide to return to UK it would be difficult. In the country where I used to live, there is law that every unpaid debt would expire after 15 years. Few times I heard stories about some people who got crazy loans from bank, left to some poor country, bought a house and started some business and just lived large. If after 15 years they go back there is nothing that can be done against them and they can just start over from a clean table.

[LobsterUnit]

^^Students from low income families are eligble for grants throughout their studies. It amounts to about 2500 each year( i think this is the average for most Somalis from cayr families). Some people take that and the tuition fee loan with riba too. Others work part time and use the grant to pay off the tuition fees. The latter is the harder and more Islamic option, but it can be done. Dunno if this would apply to eurotrash though.

[Salahuddiin]

^^Students from low income families are eligble for grants throughout their studies. It amounts to about 2500 each year( i think this is the average for most Somalis from cayr families). Some people take that and the tuition fee loan with riba too. Others work part time and use the grant to pay off the tuition fees. The latter is the harder and more Islamic option, but it can be done. Dunno if this would apply to eurotrash though.

Working and studying the same time it's not easy bro, especially for those guys with families. Anyway without a doubt it's a lot better option than dealing with the riba. Prophet SCWS cursed the one who takes riba, who pays it, who writes it down and who is witness for it and said they are all the same.

[Executive]

GaajoUnit

EU students are not eligible for that grant, unless they have lived here for over 3 years prior to commencing their degree studies.

Alxamdullilah I finished uni with no debts and a lot of savings left over, my tuition fees were covered by the Swedish govt and I was working part time at an accountancy firm throughout uni. So it worked out well alhamdullilah.

[ShirShoore7]

Unfortunately you're not eligible for support from the student finance due to strict residence requirements. You should be living in the UK 3 years prior to the start of your course in order to receive support. They are quite strict nowadays. Which EU country are you from...as each EU country has different student finance system. Your tution fees will be paid by the country you live in at the moment.

[BlackVelvet]

So you are concerned with the riba involved in the loan but you are okay with trying to find a way of skipping the bill afterwards? Excellent, reminds me of the unmarried woman refusing to take birth control pills because 'it is against Islam' though she gets pregnant every year

The UK government actually says that the loan is interest free, it is on their website so it's not a rumour. The nomial money you pay back will obviously be more but in real money sense you should technically be paying back the same amount.

[Enlightened~Sista]

So you are concerned with the riba involved in the loan but you are okay with trying to find a way of skipping the bill afterwards? Excellent, reminds me of the unmarried woman refusing to take birth control pills because 'it is against Islam' though she gets pregnant every year

[ArcadeFire]

So you are concerned with the riba involved in the loan but you are okay with trying to find a way of skipping the bill afterwards? Excellent, reminds me of the unmarried woman refusing to take birth control pills because 'it is against Islam' though she gets pregnant every year

The UK government actually says that the loan is interest free, it is on their website so it's not a rumour. The nomial money you pay back will obviously be more but in real money sense you should technically be paying back the same amount.

Thats what I thought. The only objections religious people should have is that they dont want to risk dying while they are in debt, surely?

[Salahuddiin]

Unfortunately you're not eligible for support from the student finance due to strict residence requirements. You should be living in the UK 3 years prior to the start of your course in order to receive support. They are quite strict nowadays. Which EU country are you from...as each EU country has different student finance system. Your tution fees will be paid by the country you live in at the moment.

There's no need for that support, the country which passport I'm holding will pay about 510 euros every month to a student studying in another country regardless of his or her income. I don't know if they pay the tuition fees though, I need to find out insha Allah.

So you are concerned with the riba involved in the loan but you are okay with trying to find a way of skipping the bill afterwards? Excellent, reminds me of the unmarried woman refusing to take birth control pills because 'it is against Islam' though she gets pregnant every year

The UK government actually says that the loan is interest free, it is on their website so it's not a rumour. The nomial money you pay back will obviously be more but in real money sense you should technically be paying back the same amount.

I was waiting when someone will bring this up . Actually I'm not trying to find a way to skip repayment. Just got really curious that how are they actually going to make sure that someone living outside will pay them back. It's not like they will check with Interpol every now and then did Hebel start working and how much money he's getting and track him down. I'm genuinely interested how this system works 'cos they must have some kind of back-up plan.

Even if they say it's riba-free, there is riba only with different name. If debt is tied to inflation and the actual sum will be more than the one loaned, it's riba. This is one of two major types of interest called riba al nasi'a which means that the debt will be payed later, but the sum will be more. There are several serious incompatibilities between the norms of western finance and Islamic one and unfortunately most Muslims are just imitating the western style without even trying to find a solution. Big up to Malaysian initiatives for gold-based Islamic economy.

Interest is not a small thing people make it to be, but very major sin with serious punishments. Anyone involved with riba is cursed by the Prophet SCWS, it's like adultery with one's own mother and Allah wages war against the consumer of interest.
Everyone should stay as far away from riba as they can, and these kind of things like loans for studying with riba are far from something that people can't be without. In the end it's not too hard for anyone who lives in Europe to save about 2800 euros a year. Yes it's more difficult to work at the side, but still it's million times better than get involved with riba willingly.

[Navy9]

what do you study?

[Salahuddiin]

I've studied in my own country, just would like to study more. Interested of international business with Arabic and would like to spend some time in UK 'cos lot of relatives live there.

[Salahuddiin]

http://islamicstudies.islammessage.com/ ... px?fid=119

The Council of the Islamic Fiqh Academy, held in its twelfth session, in Riyadh (Kingdom of Saudi Arabia), from 25th Jamādi ath-Thāni – 1st Rajab 1421H (28 September 2000);

Having considered the recommendations, suggestions and final declaration of the Fiqhī and Economic Seminar on Issues of Inflation (in its three sessions of Jeddah, Kuala Lumpur and Manama), and after listening to the discussions of its members, experts and some Muslim Fuqahā on the subject,

Decides the following:

Firstly: Reconfirmation of Resolution No. 42 (4/5) of the Council, which states that:

“In principle debts that have already been created in terms of a certain currency should be repaid in terms of that same currency and not in terms of an equivalent value, because a debt has always to be settled with its exact similar. It is therefore impermissible to link the already existing debts, whatever their source might be, to price level.”

Secondly: It is permissible for the two parties, and as a precautionary measure against an expected inflation, to make the debt in terms of a means other than the currency that will encounter a fall in value. Debt in this case can be made in terms of one of the following:

A) Gold or silver

B) A homogeneous commodity

C) A basket of homogeneous commodities

D) Another more stable currency

E) A basket of currencies

The amount repaid in the above forms should be exactly similar to the original debt (with regard to amount and type of currency), as the borrower should be indebted with no more than what he has received actually.

The above stated forms differ totally from the prohibited arrangement in which the two parties first specify the debt amount in terms of a certain currency, and then agree that repayment should be made in terms of another stable currency or basket of currencies (Indexation). This later arrangement has been strictly prohibited by Resolution No. 75 (6/8 — Fourthly) of the Academy.

Thirdly: It is impermissible in Sharī'ah at the time of concluding the debt contract to link the repayable amount to one of the following:

A) An accounting currency

B) Cost of living index or any other index

C) Gold or silver

D) The price of a certain commodity

E) Growth rate of Gross National Product (GNP)

F) Another currency

G) Interest rate

H) Price of a basket of commodities

Indexation in this way is prohibited because it involves a great deal of Gharar and Jahālah (uncertainty and lack of information), since both parties will not be in a position to know what will be the commitment at the end. Such lack of information violates one of the fundamental conditions of the contract validity. If the indicator used for indexation happens to show an increase, this will lead to discrepancy between the original debt amount and the amount to be repaid i.e. to commitment of usury.

Fourthly: Indexation of Salaries and Rents:

A) Reconfirmation of Resolution No. 75 (6/8) Clause: Firstly, which stipulates permissibility of indexation of salaries according to change in the price level.

B) It is permissible for the contract parties, in case of long period leasing of property, to specify the amount of rent of the first period and then agree in the contract on indexation of the rent for the forthcoming periods according to a certain indicator, provided that the rent amount will become known at the beginning of every period.

Recommendations:

The Academy recommends the following:

1. As the major cause of inflation is the increase in the quantity of money issued by concerned authorities due to various well known reasons, the Council calls on such authorities to spare no effort for eliminating this underling factor which leads to a great deal of harm to the society.

Inflationary financing, whether for the sake of curbing down the budget deficit or funding development programs, should be avoided. At the same time the Council urge upon Muslim societies to abide by the Islamic values in consumption and refrain from extravagance, affluence and profligacy which lead to inflation.

2. Increasing economic cooperation among Muslim countries specially in the field of trade and exerting efforts for substituting industrial imports from Western countries by similar products of Islamic countries. Efforts should also be exerted for strengthening the bargaining and competitive position of Islamic countries.

3. Conducting studies at the level of the Islamic banks in order to determine the effect of inflation on its assets, and propose suitable measures of safeguarding depositors and investors against adverse effects of inflation. Also at the level of Islamic financial institutions there is a need for developing accounting standards that could be used under inflation.

4. Conducting a study on the effect of extensive use of the Islamic instruments of financing and investment on inflation and the Sharī'ah issues involved therein.

5. Studying the feasibility of resorting back to some form of the Gold Standard so as to avoid inflation.

6. In view of the fact that increasing production and the actually utilized productive capacity are two of the main weapons of fighting inflation at the short and medium run, efforts should be made for enhancing the volume and quality of production in Islamic countries.

This could be done through designing plans and measures that aim towards boosting the levels of saving and investment and hence facilitating attainment of sustainable development.

7. The Council calls on the governments of the Islamic countries to put more tight controls on their budgets (including current, development and independent budgets) that draw upon sources of public revenues. Such controls include minimization and rationalization of public expenditures in the light of the directives of the Islamic Sharī'ah. When a dire need arises for evolving means for dealing with a budget deficit, governments of the Islamic countries should resort to the prevailing Islamic financial instruments which rest on partnership, sale and leasing. They should refrain from resorting to usurious borrowing whether from banks and financial institutions or through issuing of borrowing bonds.

8. Adherence to Shari 'ah controls at the time of using instruments of fiscal policy, whether for manipulation of public revenues or public expenditures. This could be done by establishing such policies on the principles of justice, public interest, relief of the poor and just distribution of the tax burden among the members of the society so that each of them takes up the share that conform to his financial ability (measured in terms of both income and wealth).

9. There is a need for using all Sharī 'ah-accepted tools of fiscal and monetary policies as well as methods of moral persuasion, and economic and administrative policies, in order to safeguard Muslim societies against the evils of inflation. Such arrangements should aim towards reducing the inflation rate to the minimum.

10. Making necessary arrangements that guarantee an independent decision of the central bank with regard to maters of monetary management and in relation to the bank's endeavor for achieving stability and fighting inflation. Moreover arrangements should be made for facilitating continuous cooperation between the central bank and the economic and financial authorities, so as to achieve the objectives of economic development, economic and monetary stability and elimination of unemployment.

11. Conducting careful studies on government enterprises with the aim of assessing their economic feasibility and considering the possibility of subjecting them to privatization in the light of the teachings of the Islamic Sharī’ah. Such arrangements are supposed to improve productivity of the privatized enterprises, reduce the budget burden and hence mitigate the adverse effects of inflation.

12. The Council urges upon individual Muslims and Muslim governments to adhere to the rules of the Islamic Sharī'ah and abide by its economic, educational, moral and social principles.

And Allāh knows best.