Asked by: Baroness Thomas of Winchester (Liberal Democrat - Life peer)
Question to the Department for Education:
To ask His Majesty's Government what progress they are making towards Sharia-compliant student loans.
Answered by Baroness Barran - Parliamentary Under-Secretary (Department for Education)
The government is committed to delivering an Alternative Student Finance (ASF) product compatible with Islamic finance principles as quickly as operationally possible. To support the delivery of an ASF product, the government took new powers in the Higher Education and Research Act 2017 to enable my right hon. Friend, the Secretary of State for Education, to provide alternative payments for students to pay for tuition fees, in addition to grants and loans. The department has also carried out work with specialist advisers, the Islamic Finance Council UK (UKIFC), on the design of an ASF model.
The government is introducing the Lifelong Learning Entitlement (LLE), which will significantly change the ways students can access learning and financial support. In response to the LLE consultation, published on 7 March 2023, the department set out aims to ensure that students will be able to access ASF as soon as possible after the introduction of the LLE.
Work is underway to assess how ASF can be delivered as a product. The Islamic Finance Council UK (UKIFC) has been reappointed to support work on ASF. Furthermore, the department is also working with the Student Loans Company (SLC) to better understand timescales for delivering an ASF product.
Further information about how to develop the ASF product can be found in a blog post on ASF, and a further update on ASF will be provided later this month. The blog is available at: https://educationhub.blog.gov.uk/2023/07/21/alternative-student-finance-how-were-making-student-finance-accessible-to-everyone/.