UK universities caught advertising ‘interest-free’ sharia loans to Muslim students

The Government is developing Alternative Student Finance, a sharia-compliant student loan scheme that replaces interest with graduate “contributions”. The money raised through those contributions would be ring-fenced to support future users of the scheme, rather than going into general Treasury spending.

Universities including Bristol, Leeds, Newcastle and De Montfort have promoted the option, which may be available from the 2026-27 academic year. Ministers say students on either plan will repay the same amount on the same schedule, and that the scheme is open to applicants of any faith. The article says more than £365,000 of public money went to the Islamic Finance Council UK to help develop it; critics argue taxpayers could still bear losses if loans are not repaid.