Geetha Philipupillai (2L)
While the legal profession has acknowledged the need to foster diversity, targeted barriers preventing Muslim students from accessing government student loan schemes have largely flown under the radar. By requiring interest payments, the Ontario Student Assistance Program (OSAP) forces some Muslim students to either compromise their beliefs, seek out private and community funders, or forego expensive post-secondary programs.
Without purporting to explain Islamic interpretations of loans and whether avoiding interest-based loans is required by religious authority, I will discuss why some Muslims have a sincerely held religious belief that such loans are proscribed. Legally, the Amselem test for freedom of religion sets out a “sincerely-held religious belief” as more constitutionally appropriate when examining state-infringing action than engaging in an assessment of the correctness of a religious interpretation or a particular doctrinal teaching.
Sincere belief that one should not give or take interest-based loans comes from traditional interpretations of Islamic law where interest is considered usurious and exploitative. Since interest benefits the lender at the expense of the borrower, interpretations of Islamic law consider it an unacceptable mode of profit. The lender’s wealth increases as the borrower sinks farther and farther into debt. By eliminating interest, Islamic financing seeks to ensure that the borrower does not entirely shoulder the risk of the loan. Thus, Islamic financing products are structured cooperatively to ensure that risk is shared between borrowers and lenders such that they share in profits as well as losses.
Modern legal opinions do allow Muslims living in Western countries to take interest-bearing loans such as mortgages to purchase houses and finance education; however, these opinions are can be contingent upon necessity or dire circumstances. Thus, although many Canadian Muslims do take interest-bearing loans, the purpose for which one accepts the loan is still significant and subjective. Further, one may accept a loan and still feel discomfort about compromising spiritual and ethical principles.
Currently, no Canadian jurisdiction offers a Sharia-friendly student loan scheme. In Ontario, interest begins to accrue on OSAP loans six months after graduation. On the provincial part of an OSAP loan the interest rate is the prime rate of interest plus 1%, and on the federal portion it is prime plus 2.5%. Repayment of OSAP loans is not tied to inflation, or post-graduation income, although loan-repayment relief is available.
As post-secondary tuition skyrockets the need for accessible government assistance takes on increasing importance. The UK government is currently implementing a Sharia friendly scheme following its 2012 decision to being charging interest on student loans which were previously only tied to inflation. The new UK scheme is based on the “Takaful” model, and came following consultations with students and religious communities. Under a Takaful structure groups of people cooperate by making a contribution to a fund and then repay the fund following graduation when they are employed and earning above a certain threshold.
In the UK context there was evidence that rising tuition rates and therefore the increasing importance of government loans to students in accessing education has prevented prospective Muslim students from pursuing higher education. Alternatively, students reported limiting their choices of educational institutions or particular programs to what they could save up for and afford without having to take an interest-bearing loan.
While there may not be specific statistical evidence on the impact of interest on Muslim students’ ability to access post-secondary education in Canada, anecdotal evidence suggests similar concerns exist here as in the UK.
Zachary Al-Khatib is a 2L who will be clerking at the Alberta Court of Appeal following graduation. He says he almost did not come to the University of Toronto, since he was unwilling to take a student loan to finance his education. For Zachary signing a student loan agreement that involved agreeing to pay interest was simply not an option, because he felt that doing so would compromise his religious convictions. Although he would take an interest-bearing loan in a situation of necessity, he did not consider attending U of T such a case, since he could have gone to a school with lower tuition. Although he did end up attending here after he found a Muslim financing organization that agreed to give him a shariah-compliant loan, he noted that other students haven’t been successful. He also noted that taking a private loan (which was limited to the difference between his financial aid assessment and total tuition) precluded him from some opportunities, such as doing an IHRP placement or going on exchange.
If the traditional means of financing an education preclude Muslim students from attending, or force a compromise between pursuing a legal career and one’s sincerely held spiritual beliefs they are discriminatory to the extent that they widen the gap between Muslim communities and the rest of society. On a constitutional analysis, the question of whether such a limit can be justified in a free and democratic society may finally uphold the government’s one-size-fits-all interest-based loan schemes. However, if the UK government’s attempt at offering a Sharia-compliant scheme successful we will have an example of a more minimally impairing option.
Ultimately, students should not have to sacrifice their religious beliefs in order to finance their post-secondary education. Just as community groups have stepped up to assist students like Zachary in attaining legal education without being forced to compromise their spiritual beliefs, the legal profession, including this law school should consider playing a role in offering alternative loan-schemes to Muslim students, or in urging the government to consider alternatives that would allow for equal access to the government service. The full and free participation of a historically underrepresented group in the legal profession may be at stake.
