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Non-interest bearing and Sharia compliant finance

You may be deterred from funding your study and living costs using the UK government’s student loans because of the interest added to the repayment of these loans.

Student loans company interest rates

Since 2012 the interest applied to student loans has varied depending on your personal circumstances including:

  • whether you are still in study
  • the level of your earnings once graduated

Alternative sharia-compliant funding system

In September 2014 the UK government undertook a consultation, read the full report here (PDF: 558KB). This explored the need for an alternative finance product based on:

  • Takaful principles
  • how this alternative finance product could be delivered by the Student Loans Company

Further support for the development and implementation of an alternative student finance product was reiterated in the 2016 Success as a Knowledge Economy report (page 59)(PDF: 3.27MB). 

In March 2023, in response to its consultation on the Lifelong Learning Entitlement (LLE), the Government said:

  • a sharia-compliant alternative student finance product would not be part of the launch of the LLE in 2025
  • it remained committed to delivering such a product "as soon as possible after 2025"

On the 28th July 2023, the government announced that it has committed to introducing a student finance product. This will have an alternative to interest payments that will be compatible with Islamic finance principles.

Contact us

If you have any finance related queries you can find out more from our Student Financial Support website. You can also email us.

For more information about faith and spirituality support at the University, please visit our Chaplaincy website.