‘Outrageous anti-British scheme’: UK universities to offer Muslims interest-free Sharia student loans

Britain's leftist government is set to offer interest-free loans to Muslim university students so that they can be compliant with Sharia law — an initiative that former Home Secretary Suella Braverman said will create a "two-tier education system."

The U.K. Department for Education noted last year that while interest has historically been charged on all student loans in the isles, "some people feel unable to use existing student loans for university or college, due to their faith or conscience."

'Sharia loans are, by their very definition, exclusionary.'

Muslims, specifically, are prohibited by Sharia law from engaging in "riba" — the practice of charging interest or fees on loans, which is regarded as usurious and exploitative.

Britain has long humored implementing a Muslim loans system. At last, the Labour government — ever-keen to chase the support of the over 3.9 million Muslims in England and Wales — is poised to make good on its promise of introducing a “student finance product with an alternative to interest payments” that would be based on the Islamic finance principle of Takaful and certified by the new Islamic Finance Supervisory Board comprising appointees of the Islamic Finance Council UK.

Takaful, which comes from an Arabic word meaning "joint guarantee," is a Saracen system of insurance where participants pool money together in a shared fund to support each other and protect one another from risk.

The Sharia-compliant program will not require borrowers to pay interest on the principal. Instead, they will pay an equivalent "contribution" that will be set aside to help future borrowers instead of going to the British Treasury, the Telegraph reported Tuesday.

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Depiction of a Muslim university in Cairo. Fine Art Images/Heritage Images/Getty Images.

According to the government,

Students with the same circumstances will get the same amount of financial support. Students will make contributions back to a Takaful fund of the same amount and at the same time as students making repayments for conventional loans. We will base these contributions on what people earn, not what they have received.

The Sharia loans, which will be available to non-Muslims as well, are already advertised at numerous British universities including Oxford University, De Montfort University, and the University of Bristol, which characterized the option as an "interest-free" student-funding option.

Suella Braverman, the former home secretary now serving as an MP and Reform U.K. education spokeswoman, told the Telegraph, "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," continued Braverman. "Sharia loans are, by their very definition, exclusionary and for the benefit solely of Muslim students, thus creating parallel institutions that are incompatible with the British way of life."

Braverman, who has in recent years sounded the alarm about the failure of multiculturalism, added, "The whole idea is made even more farcical by the fact that the Treasury, and therefore British taxpayers, will have to foot the bill if they fail to pay."

The burden of delinquent borrowers already weighs heavy on the British taxpayer.

According to a House of Commons Library report published in July, £21 billion is loaned to around 1.5 million higher-education students in England. As of March, the value of outstanding loans was over £295 billion.

The government estimated that only 55% of full-time undergraduates who enrolled in the 2025-2026 academic year would repay their loans in full.

A spokesman for the Department of Education told the Telegraph that it would be "completely false to assert that Alternative Student Finance arrangements would give favourable treatment to Muslim students."

While a date has not yet been set for the program's full implementation, the government has suggested that it will be launched in the 2026-2027 academic year.

Jacqui Smith, the Labour minister of state for skills, reiterated in a written parliamentary response on Oct. 7 that "the government is committed to introducing an Alternative Student Finance (ASF) product compatible with Islamic finance principles and continues to make progress towards its delivery."

Smith noted further that "ASF will be introduced as soon as possible following the introduction of the Lifelong Learning Entitlement and will mirror the mainstream student finance offer, requiring the same repayments to the scheme as those required for conventional loans."

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