British Universities Push Sharia Loans While Taxpayers Cover the Unpaid Tab
13th November 2026
British universities are now openly advertising government-backed “interest-free” student loans designed around Islamic finance rules.
The Alternative Student Finance product, based on the principle of takaful, replaces interest with a mutual “contribution” that is ring-fenced to fund other students on the same scheme rather than flowing back into the Treasury.
Official forecasts already expect nearly half of student debt never to be fully repaid, so British taxpayers will underwrite the shortfall while the ring-fenced pot serves a program primarily aimed at Muslim students, the Telegraph reports.