Question to the Department for Education:

To ask the Secretary of State for Education, pursuant to the Answer of 12 September 2017 to Question 7482, when his Department plans to announce plans to bring forward legislative proposals for the establishment of a Sharia-compliant alternative student finance product.

We understand the concern that some prospective students may be deterred from pursuing higher education because they are unable to use loans that bear interest.

We are therefore continuing to work on an alternative student finance product that would avoid using interest. We have appointed specialist advisors from the Islamic Finance Council to help design a new system that can make maintenance and tuition fee payments and collect repayment contributions in a way that is both equivalent to the current system and compliant with the requirements of Islamic finance.

This a complex area requiring careful consideration of a range of technical issues, including the nature of the accounting for the new arrangements, the degree of legal separation required for any fund, the treatment of cash flows, the nature of the commitments that a student will make under the new system, and the method for establishing equivalence of outcome, amongst others.

We are making progress and expect to be able to provide an update in the summer, when we have clarity on what we need to do to introduce the alternative product.