Sharia Law and study loans | University of Leeds

What this page offers

This is a guide from the University of Leeds for Muslim students who are concerned that interest-bearing student loans may conflict with their faith. Islamic Sharia law prohibits Riba, that is, the payment or receipt of interest for profit. This page explains how this affects UK government student loans and outlines interest-free alternatives. The University also awards its own scholarship: the Leeds Bursary, which amounts to £500 to £2,000 per year depending on your household income. This is a grant that you will never have to repay.

The guidelines set out three options. Firstly, some British banks (such as Al Rayan Bank and UBL) offer Sharia-compliant accounts, which avoid investments in gambling, alcohol or weapons. Secondly, the UK government charges interest on its master’s and doctoral loans at the Retail Price Index plus 3%, and Islamic scholars are divided on whether interest that merely keeps pace with inflation constitutes riba. Thirdly, the government plans to introduce Alternative Student Finance via ‘Student Finance England’ from the academic year 2026/2027 onwards, an interest-free option that is compatible with the principles of Islamic finance.

Who the Leeds Bursary is for

• University: You’re studying at the University of Leeds.
• Degree level: You are a full-time or part-time student on a bachelor’s degree programme lasting at least one year.
• Nationality and residence: You are a British student who has ordinarily resided in England, Northern Ireland or Scotland during the three years prior to the start of your degree and who took up residence in the United Kingdom on the first day of your degree.
• Tuition fee: You pay the maximum tuition fee (£9,535 in 2025), which is reduced on a pro rata basis if you are studying part-time.
• Financial need: Your annual household income is less than £42,875.. The lower your income, the higher the grant will be.
• Income check: The Student Loans Company will assess your household income. This assessment will take place even if you decide not to take out a loan.
• Qualification: You do not yet hold an equivalent or higher qualification. This rule does not apply to students studying nursing, midwifery, dental hygiene or dental therapy who receive full statutory funding.

How to apply

Full-time students do not need to submit an application. Your eligibility is automatically checked on the basis of your academic records and the income details you provide to the Student Loans Company. Part-time students submit their application every October. If you do not wish to take out a loan but would still like to receive the grant, please complete the government’s student finance forms so that your income can be assessed.

How realistic are your chances?

The Leeds Scholarship is guaranteed and is not subject to a selection process. If you are studying at Leeds, meet the residency and fee criteria, and your household income is below the threshold, you will receive it. There is no selection panel you need to convince. For full-time students, the grant is awarded automatically; the only thing standing between you and the money is the completion of the means test.