UK universities have been accused of anti-British behaviour after offering "interest-free" student loans to Muslim students. The "Alternative Student Finance" programme, which received more than £365,000 in public funds, was described by the Islamic Finance Council UK as one of the first of its kind in the world.
Universities offering the loans
The University of Bristol said its "interest-free UK Government loan" would be "compatible with Islamic finance principles", The Telegraph revealed. The University of Leeds also told students that the loans could be available for the 2026-27 academic year.
King's College London said that students who cannot take on student loans for either tuition fees or maintenance support may still be able to apply, but "should indicate in their supporting statement that they are not in receipt of a loan due to their religious beliefs".
How the scheme works
Interest from regular student loans goes back to the Government to help run the country, whereas repayments from the "Alternative Student Finance" programme would be spent on others joining it. However, taxpayers will still have to foot the bill if the loans are not repaid in full.
Under Sharia law, Muslims are prohibited from paying or earning interest because it's viewed as exploitative and unjust. Known in Arabic as riba, it is condemned in the Quran because it allows wealth to accumulate while low-income borrowers are trapped in debt.
Reactions and official response
Suella Braverman, the Reform spokesman for education, said offering such loans risked "creating parallel institutions that are incompatible with the British way of life". She said: "This outrageous anti-British scheme creates a two-tier education system and divided society. The scheme from Labour proves they are addicted to double standards in all aspects of British life."
A Department of Education spokesman said it would be "completely false to assert that Alternative Student Finance arrangements would give favourable treatment to Muslim students". They said: "All graduates will be repaying their loans in full regardless of which system they use, including an equivalent alternative to interest," he added. "This approach to student finance unlocks higher education for thousands more students and means that nobody is excluded from a university education because of their faith."
The Department of Education did not provide a date for the introduction of the "Alternative Student Finance" programme, but it was introduced as part of a package of changes to student finance earlier this year.
