Sharia-compliant Student Finance

Lord Ahmad of Wimbledon Excerpts

Wednesday 13th November 2024 Lords Chamber

[Baroness Smith of Malvern (Lab)]

Obviously, we keep interest rates, which are linked to the RPI for student finance, under review. But in principle, as far as the student finance system is concerned, it is right that students who continue to get considerable benefit from higher education help to fund that higher education, alongside the taxpayer, who also of course stands behind the loan system. At the end of the period of its term, a loan will be written off for any student who has not repaid by that point.

[Lord Ahmad of Wimbledon (Con)]

My Lords, in welcoming the continuation of the initiative of the previous Government, it is also important that the principle of takaful, which is inherent in Islamic finance, is also made abundantly clear to the community. Building on my noble friend’s question on the issue of communicating, it is a barrier to entry and to higher education, particularly for young girls. These girls are often very high attainers.

[Baroness Smith of Malvern (Lab)]

The noble Lord makes a very important point. Perhaps I was not clear enough in response to his noble friend. Part of the work that we are doing is to engage with the Muslim community, firstly to ensure that the plans the Government are putting in place will be sharia-complaint and acceptable to the community, and also to ensure that the message about the ability to take up this student support in order to be able to undertake higher education is properly communicated. We are absolutely committed to continuing with that engagement, including with Islamic finance specialists.