According to a number of UK Shariah scholars, student loans are not considered to be typical “loans” on the basis that:
1. The “loans” are being provided by the Government to enable students to study at Government owned or controlled universities; and
2. The “loans” are not repayable unless certain conditions are met (eg the beneficiary of the “loan” commences employment and earns a minimum threshold amount).
On the basis that, inter alia, the above two conditions are met, the “loan” can be treated as an investment contract, whereby the Government invests in educating the student in return for a fixed rate profit, that becomes payable once the student commences employment and earns a minimum threshold amount.
It would be interesting to explore how this analysis may perhaps be extended to other financings where the obligation to repay is subject to certain conditions being satisfied.