Faizel Patel, Radio Islam News - 10-11-2016
The Muslim Lawyers Association (MLA) has called for all interest on the National Student Financial Aid Scheme (NSFAS) be written off as it is not in line with Islamic principles.
The organisation says it has a written a letter to President Jacob Zuma and the minister of higher education Blade Nzimande outlining the burden interest on NSFAS loans has on students and families.
The MLA says while there have been questions raised about whether tertiary education must be free for all or free only for the poor, or that tertiary education must be subsidized or not subsidized, there appears to be nationwide consensus that the status quo is fraught with difficulty and is in urgent need of revision.
Interest is considered haraam in Islam because a large measure to the system of interest results in a disproportionate burden being placed on the poor and the transfer of more wealth to the rich.
The MLA says that while interest charged on loans by NSFAS is earmarked to assist the poor, interest based loans on the scheme ironically, but significantly, contributes to increasing the debt burden of poor families.
Spokesperson Yousha Tayob says a state that is committed to alleviating the hardships suffered by the poor simply cannot afford to add to those burdens by levying interest on student loans to the poor.
“The present reach of NSFAS is close to 500 000 loans per year. The increased funding allocation to NSFAS will increase the number of loan recipients. The interest burden of an already overburdened poor community will simply increase.”
Tayob says the MLA proposes that all interest on NSFAS generated loans be written off and that all future funding through scheme be interest free.
“Whilst we accept that the abolishment of interest in the NSFAS funding model addresses only part of the problem, it is a necessary step to take if any meaningful progress is to be made in resolving the crisis.”
Tayob says the relief to the poor were the interest burden to be lifted will be immediate and lasting and may pave the way for the forging of unity at a time when it is much needed.