Reform UK Shadow Education Secretary Suella Braverman has condemned plans for sharia-compliant student loans, warning that the government is creating “parallel institutions that are incompatible with the British way of life”.
Speaking to the Telegraph, Braverman said: “This outrageous anti-British scheme creates a two-tier education system and divided society.
“The scheme from Labour proves they are addicted to double standards in all aspects of British life.”
Her comments come as several British universities advertise the proposed Alternative Student Finance scheme, which is designed to enable students who object to paying interest on religious grounds to access university funding.
Islamic law prohibits paying or receiving interest. Under the proposed system, students would instead make an equivalent “contribution”, with repayments ring-fenced to support future participants in the scheme.
Braverman also challenged the potential cost to taxpayers if borrowers do not repay their funding.
“The whole idea is made even more farcical by the fact that the Treasury, and therefore British taxpayers, will have to foot the bill if they fail to pay”, she said.
The government paid Islamic Finance Council UK more than £365,000 of public money to help devise the scheme.
The proposed arrangements are based on the Islamic finance principle of takaful, a form of group-based mutual support. The Islamic Finance Supervisory Board would certify the scheme.
Universities including Bristol, Leeds, University College London and Newcastle have already promoted the proposed finance to prospective students.
Bristol described it as an “interest-free UK government loan”, while Newcastle used the terms “non-interest bearing” and “sharia-compliant finance”.
The Department for Education has not announced an introduction date, although Bristol and Leeds have advised students that the scheme could become available during the 2026-27 academic year.
Reform UK Shadow Home Secretary Zia Yusuf also condemned the plans, calling the scheme “literally the definition of ‘two-tier’”. “Reform will stop this madness”, he said.