Student loans, funding and Sharia law

As a Muslim student or a member of another faith, you might worry about taking out a UK government student loan because of interest payments.

But, the way that interest is charged on these loans has changed for students in England. Since 2023-24, the amount new borrowers repay only increases by the rate of RPI (retail price index) inflation. This means the amount of money you owe does not have extra interest added.

The UK Fatwa Council has also advised that student loans are permissible.

How student loans may affect eligibility for other funding

Applying for a student loan, even if you do not accept it, can help you to get some types of funding, including:

• the Cambridge Bursary
• some other University funding, like outreach scholarships
• some non-repayable government student finance, like grants for dependants or disability-related course costs

This is because they use your loan application to assess your eligibility.

To be eligible for some financial support, you need to have received your student loan. For example, Cambridge's Undergraduate Financial Assistance Fund, which can provide support for students experiencing unexpected financial hardship after their course has started, and interest-free student bank account overdrafts.

Welfare benefits

If you claim welfare benefits as a student, the office assessing your claim will assume you have taken your full student loan entitlement. They will reduce your benefit entitlement accordingly.

Making your decision

If you decide not to take a loan, you need to make sure you can cover the cost of your education.

To ask questions or get help deciding whether to take up a student loan contact the Cambridge College you plan to apply to.