Expected increase in student loan interests a religious dilemma for Muslim students
With the European Central Bank (ECB) raising interest rates and inflation caused by the coronavirus crisis and war and Ukraine, Minister Robbert Dijkgraaf of Education warned that the interest on student loans might increase. For many Muslim students, this isn’t only a financial setback but also a religious dilemma. “Because interest is not allowed in Islam,” student Ahmed Emin Batman said to Trouw.
If the government does start charging interest, Batman will stop his loan and quickly pay off his accumulated student debt by borrowing from friends and family, he said. “I don’t feel hugely guilty for my religion because politicians made us all kinds of false promises. But if I’d known we’d have to pay interest soon, I probably would have figured out a different way and not borrowed from the start.”
Student union LSVb and MSA Nederland, an umbrella organization of 15 Islamic student associations, told Trouw that they regularly receive calls from concerned Muslim students.
According to the law, the interest on student loans is linked to the interest on government bonds. The past decade's low-interest rates meant, in practice, that students didn’t pay interest on their student loans since the loan system was implemented in 2015.
DUO, the education institution that provides the student loans, is aware of the religious dilemma for Muslim students and is discussing the problem with the Ministry, a DUO spokesperson said. But “the law applies to everyone.” According to the spokesperson, the confusion about the interest is not caused by a lack of communication but by habituation. “Since the current system was introduced, students have been spoiled year in and year out with zero percent interest.”