Are student loans Islamically permissible?

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Please refer to the following summary from the American Muslim Jurists Association (AMJA) fiqh council on the topic. This outlines several options which you can consider to reduce or eliminate the amount needed from interest-based loans.

If your situation as you described that you feel higher education is a necessity for you and not accommodation and prestige, then you are eligible to pursue it with that intention insha’Allah.
You need to try your best to pay it off as soon as possible and not delay paying it off for many years as many students do.

In Fiqh rulings, there is a difference between starting education with a student loan as opposed to resorting to a student loan to continue one’s education, based on the maxim, “What occurs to continue something could be overlooked while it would not be overlooked when beginning it.”
Based on the above maxim and since you are close to your graduation date, Insha’Allah you can access a student loan only for the need to graduate.

Some professional school/graduate school students consider work-study programs or partial interest-free financing from family or friends. Institutional options e.g. A Continuous Charity remain relatively few, but it certainly helps to investigate. From people that have spoken to me, being frugal and prudent in living standards has been the main source of savings for many who have pursued further education. Of course, you may consider consulting with those in the field as well.


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