Question # 573: Assalamualaikum I want to ask. Before this I’m not really a religious person. I use a lot of haram money and invest it into my education. The money is from student loan that I actually don’t meet one of the most crucial conditions to make me eligible for it. We need to pay back after we graduated. I paid fees, bought internet to do my assignments, bought stationery and used it to answer my exam, and some books using that money. Right now, I already realised my mistake and I want to repent and not use that money anymore. So my question is, does my action make it haram for me to use my diploma later after I graduate? What should I do? I really regret this right now and afraid that it’ll be haram for me to use my diploma later after I graduate

Assalamu ‘laikum warahmatullahi wabarakatuh,

All praise and thanks are due to Allah (سبحانه و تعالى), and peace and blessings be upon His Messenger (صلى الله عليه و سلم).

Dear questioner,

First of all, we implore Allah (سبحانه و تعالى) to help us serve His cause and render our work for His sake.

Shorter Answer: Taking riba-based loans, including those for education, is haraam. The Qur’an warns of severe consequences for engaging in riba, and the Prophet Muhammad (صلى الله عليه و سلم) cursed those involved in any aspect of riba transactions. The Assembly of Muslim Jurists of America (AMJA) emphasizes that interest-based student loans are generally impermissible but may be acceptable in cases of urgent necessity if no alternatives exist. Muslims are encouraged to explore options like scholarships, work-study programs, and grants before resorting to interest-based loans. AMJA also emphasized the need to seek the opinion of scholars to estimate such needs and urgencies.  For individuals who have taken such loans out of ignorance, repentance and seeking forgiveness are essential. If one cannot avoid repaying the loan with interest, one should do so while disapproving it in one’s heart. Importantly, using a degree obtained through a riba-based loan for employment is not prohibited, as the prohibition pertains to the loan itself rather than the education received.

Long Answer: It is not permissible… to take…a riba-based student loan, no matter how low the interest rate, because Allah (سبحانه و تعالى) has forbidden contracts that involve riba, whether the riba is great or small, even if it is only one dirham/[dollar], and He has warned the one who consumes it and the one who pays it of punishment, wrath, and curses. So beware lest you be one of them.

Allah (سبحانه و تعالى) says in the Qur’an: “Those who eat riba (usury) will not stand (on the Day of Resurrection) except like the standing of a person beaten by Shaytan, leading him to insanity. That is because they say: “Trading is only like riba,” whereas Allah has permitted trading and forbidden riba. So, whosoever receives an admonition from his Lord and stops eating riba shall not be punished for the past; his case is for Allah (to judge); but whoever returns [to riba], such are the dwellers of the Fire – they will abide therein (ayah 275); Allah will destroy riba and will give increase for Sadaqat (deeds of charity, alms, etc.) And Allah likes not the disbelievers, sinners (ayah 276); Truly those who believe, and do deeds of righteousness, and perform As-Salat, and give Zakat, they will have their reward with their Lord. On them shall be no fear, nor shall they grieve (ayah 277); O you who believe! Fear Allah and give up what remains (due to you) from riba (from now onward), if you are (really) believers (ayah 278); And if you do not do it, then take a notice of war from Allah and His Messenger but if you repent, you shall have your capital sums. Deal not unjustly (by asking more than your capital sums), and you shall not be dealt with unjustly (by receiving less than your capital sums) (ayah 279); And if the debtor is in a hard time (has no money), then grant him time till it is easy for him to repay, but if you remit it by way of charity, that is better for you if you did but know (ayah 280); And fear the Day when you shall be brought back to Allah. Then every person shall be paid what he earned, and they shall not be dealt with unjustly (ayah 281)” (Soorah Al-Baqarah, 2:275-281)

The Prophet of Allah (صلى الله عليه و سلم) cursed the one who consumes riba and the one who pays it. (Narrated by Al-Bukhari). In another hadith, the Prophet (صلى الله عليه و سلم) cursed the one who consumes riba, the one who pays it, the one who records it, and the two who witness it. He said they are all the same. (Narrated by Muslim)

[If one has already taken the interest-based loan and spent it on education out of ignorance, he/she] has to repent and seek forgiveness, and feel regretful…, and resolve not to do it again. And be of good cheer, for Allah accepts the repentance of His slave when he/she repents. Allah (سبحانه و تعالى) says in the Qur’an: “And there is no sin on you if you make a mistake therein, except in regard to what your hearts deliberately intend. And Allah is Ever Oft-Forgiving, Most Merciful” (Soorah al-Ahzaab, 33:5) The Prophet (صلى الله عليه و سلم) said: “The one who repents of sin is like one who did not sin at all.” (Narrated by Ibn Majah; classed as hasan by Al-Albani in Sahih Ibn Majah)

It is worth noting the decision of AMJA’s (Assembly of Muslim Jurists of America) Sixth Annual Convention (2009) in Canada regarding the issue of Student Loans:

“The default is the forbiddance of interest-based loans regardless of whether these loans are for students or otherwise due to it falling under the clear interest that the scholars unanimously agreed, past and present, on its impermissibility. It is incumbent that all efforts are spent in finding permissible alternatives before leaping to the justification of urgency or need.

In the world of Western universities, academic scholarships are granted for the outstanding (students) and unable (to afford), alongside work-study opportunities that allow for combining studying and earning, by which one can avoid falling into these loans. Also, there may be subsidized loans that the nation pays its interest if the student is able to repay all he owes within six months of his graduation. In addition, there are grants provided by some companies and institutions in exchange for employment contracts with it after graduation. It is incumbent that one spends his efforts in (trying) all this.

If all of these are nonexistent, and the interest-based loans are the only way to facilitate the beginning or continuation of a university education or the only way to secure the Muslim communities need for what cannot be done without of professions and expertise, then this is considered an urgent necessity that removes the sin even though the ruling of impermissibility remains. This is upon the condition that the one forced to this isn’t an aggressor nor transgressor, and this is by giving the urgent need its proper estimate and by continuing to search for a permissible alternative and breaking free of these interest-based loans when one is first able to do so in order to minimize the interest amount paid as much as possible. We emphasize the need to return to the people of Fatwa (i.e., qualified to pass a juristic opinion on Islamic Law) to estimate these needs and urgencies. It isn’t correct for just anyone to assume the responsibility to do this or to measure his need on the need of others.”

[As for the repayment of the loan,] if one cannot get rid of this loan, then he/she has to pay it off. If one can get out of paying the interest without any negative consequences, then one must do that… [for example, if it is possible for him/her to pay off the capital only and have the interest waived.] If one cannot avoid paying this interest, then pay it because you are forced to do so whilst hating it in your heart. Allah does not burden anyone beyond what he is able to bear. It is sufficient for him/her to repent and be regretful.

[Lastly,] as for the certificate/ [diploma earned, the use of it to secure profession/job] …is not prohibited due to that [riba-based] loan because the prohibition of riba is related to …the person who got the loan, and not to the money itself or the benefits in which that money was spent. So, one can work with that certificate/[diploma/degree] in all fields that Shari‘ah (i.e., Islamic law) does not prohibit.

(The above reply is based on the following resources:

  • Islamqa.info
  • Amjaonline.org
  • Islamweb.net)

Allahu A’lam (Allah (سبحانه و تعالى) knows best) and all Perfections belong to Allah, and all mistakes belong to me alone. May Allah (سبحانه و تعالى) forgive me, Ameen.

Wassalaam