In September 2025, a claim (archived) circulated online that the U.K. government offered "Sharia law compliant," interest-free student loans to Muslim students.
According to the Council on Foreign Relations, a U.S. foreign policy think tank, Shariah is "the divine counsel that Muslims follow to live moral lives and grow close to God." Interpretations of Shariah, the principles of which stem from the Quran and hadith, the latter of which are sayings attributed to the Prophet Muhammad, form the basis of Muslim law.
One popular X post on the topic read, "UK government now offers Sharia law compliant interest free loans for Muslim students, overseen by the UK Islamic Finance Council"
The claim also circulated on Facebook (archived) and Instagram (archived).
The claim used screenshots from a real U.K. Department of Education webpage about "Alternative student finance," a student loans program "compatible with Islamic finance principles." According to the Department of Education, the new loans program would bridge a gap to potential students who could not use existing programs "due to their faith or conscience" that prohibited taking loans that charged interest.
The alternative student loans system, if realized, would deliver on a 2013 pledge made by then-Prime Minister David Cameron that, "Never again should a Muslim in Britain feel unable to go to university because they cannot get a Student Loan – simply because of their religion."
However, though work on the program had been underway since at least 2011, alternative student finance was not available to students by September 2025. According to the Department of Education, the program must follow changes to the U.K.'s existing system due to come into force in the 2026/2027 academic year. The department had not confirmed when alternative student finance would be available to students at the time of this writing. Given the above, we rate this claim a mixture of true and false elements.
Interest-bearing loans clashed with Islamic principles
Undergraduate students in the U.K. obtaining their first bachelor's degree are generally eligible to take out a student loan with the relevant student finance body. Students borrow money from the Student Loans Company, a U.K. government-owned organization that administers loans and grants.
Under this system, the student finance body pays the undergraduate tuition fee directly to the university on behalf of the student. Students start repaying a percentage of their earnings each month once they earn above a set amount per year. Students can also take out "maintenance loans" that go toward covering the cost of living while at university.
At the time of this writing, all loans from the Student Loans Company charged interest.
That interest posed a problem for some students, most commonly of Muslim faith according to the Department of Education, because that religion "prohibits engagement with interest."
According to Islamic Relief UK, a leading Muslim charity, receiving or paying interest known as Riba was discouraged in the Quran and viewed as haram, or forbidden by Islamic law.
Fulfilling Cameron's pledge
In 2024, the Islamic Finance Council UK (UKIFC), a body that has appointed a board of supervisors to certify the alternative student finance system, wrote that the system was "designed to provide a Sharia-compliant alternative to traditional interest-bearing student loans."
According to the Department of Education, the alternative student finance system would be based on the Islamic system of "takaful." Commonly used for insurance, under this system, people pay into a pool of money and are reimbursed from there if needed. In the case of insurance, takaful funds do not invest the payments from participants or earn interest on the funds.
Under the alternative student finance system, students would repay at the same threshold and rate as students borrowing under the traditional system that did charge interest. However, repayments into the alternative system would be "ring fenced" and spent on future loans. The Department of Education wrote:
After they leave their studies, students will repay contributions. These contributions will be equivalent to the repayments made for traditional student loans. The contributions are then "ringfenced" to help future students. This means that the funds are used only for providing alternative student finance.
In June 2025, the Department of Education wrote that it still needed to establish through legislation specifics such as the amount of finance available and the rate of repayment to the takaful fund.
While the system was not in place 12 years after Cameron's 2013 pledge, UKIFC remained optimistic that it could increase access to the U.K.'s education system.
UKIFC wrote in 2024, "Disappointingly, over a decade from the first announcement we are not there – yet! Introduction of ASF [alternative student finance] remains a significant step towards ensuring that higher education in the UK is inclusive and accessible to all, respecting the diverse beliefs and needs of its student population."