A new model for Sharia law-compliant student loans has been unveiled today (3 April 2014) by Universities and Science Minister David Willetts.
The proposed system will enable people whose religious beliefs forbid them from taking out loans that accrue interest to take advantage of student loans.
Speaking at a Universities UK Conference on universities and growth, David Willetts launched a consultation on the proposed model asking for views on whether it is an acceptable alternative to the conventional system.
The model will be available to anyone who adopts similar financial principles. Anyone taking the loans will not be at any advantage or disadvantage – they will repay the same amount as other borrowers.
David Willetts said:
The government is committed to ensuring that anyone with the ability and desire can go to university.
Sharia-compliant student loans will also give universities access to a wider pool of talent and help the UK get the higher level skills we need to secure long-term economic growth.
The intention to develop Sharia law-compliant student loans was announced by the Prime Minister last year (2013).
The consultation opened today (3 April 2014) and will run for 12 weeks.
Notes to editors:
The full consultation document can be found at https://www.gov.uk/government/consultations/sharia-compliant-student-finance.
The government’s economic policy objective is to achieve ‘strong, sustainable and balanced growth that is more evenly shared across the country and between industries’. It set 4 ambitions in the ‘Plan for Growth’, published at Budget 2011:
- to create the most competitive tax system in the G20
- to make the UK the best place in Europe to start, finance and grow a business
- to encourage investment and exports as a route to a more balanced economy
- to create a more educated workforce that is the most flexible in Europe
Work is underway across government to achieve these ambitions, including progress on more than 250 measures as part of the Growth Review. Developing an Industrial Strategy gives new impetus to this work by providing businesses, investors and the public with more clarity about the long-term direction in which the government wants the economy to travel.