Interest on insurance accounts and student loans : financing education

السؤال

[Question one] : Assalaamu Alaikum Sh. Kahf, I pray that you are doing well, InSha Allah. Shaykh, I wanted your advice on education-financing products. As you know in North America post-graduate education can be very expensive. It is more expensive in the US than in Canada. Most students end up taking student loans through government sponsored financing institutions or just plain bank loans. Ultimately, students end up with a large debt by the end of their education period. And unless they pay it all out within 6 months they will be paying interest on the outstanding debt (law in Canada). Interest-free loans, though useful, are not always available unless you have some contacts. I have been doing some research and now with the Islamic banking education from INCEIF, it has been very helpful in guiding my research as well as product design. I am thinking more along the lines of a sort a "public-private investment fund" that somehow brings government funding as well as private investors together to fund education as a form of investment. I know educational services in and in itself are not an asset, but could these be structured as an "investment opportunity" for investors / financiers ? How would you frame our education financing issue ? If you have come across a practical model and / or institute that has done it well, I would appreciate if you could introduce it to me or point me in that direction. I was really hoping to see you in KL and benefit from your knowledge, unfortunately I am tied in Canada. [Question two] : Ramadan Kareem to you and your family ! Alhamdulillah, we have been progressing towards offering small-scale financing services within the community. We are starting off with used-vehicles, home appliances / renovations, and now looking at education financing. We will be starting out small, in the range of $ 5K and then raising the bar as we go along. You had mentioned that education could be financed using quasi-Murabahah. If I understand it correctly, the process would work the following : 1. Student approaches us for education financing 2. We buy the course for the student (pay for the course) 3. We charge the student a mark-up price for the course we paid Am I missing any steps here ? As well, could do a similar arrangement for professional services financing ? For example, if a commercial organization would like to retain accounting or legal services and is looking to finance those services, we could do it based on Murabahah ? The reason I ask this is because there is some confusion on the treatment of "goods" as assets while "Services" aren't. Hence, there is the issue of ownership, I.e. can we "own" a particular service such as accounting service. Since ownership of the asset is required in selling under Murabahah, knowing the ownership status in trade of assets would be important.

جواب الفتوى

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تاريخ النشر

2010-08-15

التخصصات الرئيسية

العلوم المالية و المحاسبية
العلوم التربوية
الدراسات الإسلامية

الموضوعات

• التعليم
• التمويل

عدد الصفحات

4

نوع البيانات

فتاوى

لغة النص

الإنجليزية

رقم السجل

BIM-730599

• APA
• MLA
• AMA