Muslims demand Sharia student loans because paying interest goes against Islamic law

Muslim groups are calling for a separate student loan system because the interest due to be charged will conflict with rules of Sharia law.

The changes to tuition fees, which come into force next year, will see students charged higher rates of interest on the loans they take out to pay for university.

Until now they have paid the market rate of inflation but the reforms mean students who go on to earn more than £21,000 will have to pay interest of up to 3 per cent.

But in some interpretations of Sharia law, which is Islam's legal system and governs every aspect of Muslim life, loans are forbidden.

The National Union of Students has said it could be two years before an alternative system is worked out, leaving some Muslims fearing they cannot go on to further study.

The Federation of Student Islamic Societies told The Independent that the rate increase was a 'pressing issue'.

A spokesman said: 'Because the rate of interest is above the rate of inflation, it is quite blatant usury.'

Usury means the practice of lending money and charging the borrower interest, possibly at a very high rate. 

Mohammed Ahmed-Sheikh, 17, says the changes will discourage him from applying to university next year.

'The fees are the reason I'm having doubts. I'm Muslim and loans are against my religion,' he told The Independent.

Ahmad Mitoubsi, 21, who graduated this year, added: 'We've just had to adapt to the British system or else I couldn't have gone to uni.'

The Department of Business, Innovation and Skills says discussions are ongoing with student groups about a solution.

But it is thought an alternative, such as already happens with mortgages in which education could be 'rented' instead, may not be agreed until the 2013/14 academic year. 

Sharia law is Islam's legal system. It was derived from the Koran, as the word of God, the example of the life of the prophet Muhammad and fatwas - the rulings of Islamic scholars.

It is different to the legal traditions of the Western world because it governs - or informs - everything about how a Muslim lives.