The British government is planning to introduce student loans which will be compliant with Shariah law in order to encourage more Muslims to attend colleges and universities in the UK.
If ever there was a smoking gun that Shariah-compliant loans were a sham, this is it:
The principles of Shariah law recognize the value of money over time. Given the long period over which most students would make repayments into the fund, the total contribution they would be obligated to make would be based on a benchmark.
This benchmark would be set relative to the traditional loan system and would ensure that students who made use of either the alternative finance product or traditional loans would be treated the same.
In other words, the loan mechanism charges interest, they just don’t call it “interest.”