Abstract
Quality Higher Education transforms human life into meaningful human resources. Moreover, it brings qualitative changes in humankind and socioeconomic development with the help of extended knowledge and higher skills. But, most of the traditional student loan mechanisms are based on interest (riba) therefore, many devout Muslims are struggling with traditional student financing, as interest (riba) is impermissible in Islamic shariah. This study aims to analyze student financing concepts based on shariah perspective and to evaluate the shariah issues that are associated to its application. The present qualitative study adopts mostly relied primary and secondary sources of Islamic shariah such as Quran, Hadith, Islamic Jurisprudence, and Islamic scholars’ views. The deliberations evolve at reviewing on the shariah concept of Qard-al-hassan, Qard-bil-ujrah, waqf (Islamic trust bank), and takaful. Finally, the present study highlights that the higher education financing based on the shariah concept could also be generalized into education financing that would be interest(riba) free and acceptable to the Muslim community at large.
Highlights
Investment in quality higher education is socially and economically productive investment (Blom & Canton, 2004; Psacharopoulos, 1986) as it promotes acquiring extended knowledge, skills, and intelligence (Chaiwut, Rueangsirarak, & Chaisricharoen, 2018)
Wahyu Jatmiko, 2018 explained that Introducing an integrated waqf (Islamic trust) and takaful fund into the market can potentially reduce the student loan problem and help achieving optimum benefits for the society. This is a conceptual review study adopted for re-examination and evaluation of the higher education financing based on Islamic Shariah - an unconventional approach of student loan from the course of the existing and prominent research works and literatures
We conducted general searching of research works and literatures in the name of Education Financing, Shariah Based Financing, Qard Al Hassan, Qard Bil Ujrah, Waqf, and Takaful in the online data base sources such as Google Scholars, Spingers link, Wiley, Science Direct, JSTOR, Emerald full text, Scopus, and EBSCO HOST etc
Summary
Investment in quality higher education is socially and economically productive investment (Blom & Canton, 2004; Psacharopoulos, 1986) as it promotes acquiring extended knowledge, skills, and intelligence (Chaiwut, Rueangsirarak, & Chaisricharoen, 2018). The quality higher education is improving knowledge level for discovering, generating, and apprehending, capturing, sharing, and motivating students for promoting their personal and collective development (Natek & Lesjak, 2011; Simon, Małgorzata, & Beatriz, 2007). The higher education loan is deliberated as an important student financing mechanism due to budgetary austerity and dwindling natural resources (Baum, 2016; Psacharopoulos, 1986; Ziderman, 2002). Mounting costs and demands coupled with dwindling national resources lead to cost-sharing among government, students, parents, and households and developed a dominant mechanism of subsidized higher education loan over the seventy countries around the world (Johnstone & Shroff-Mehta, 2003; Salmi, 2003). Initiation of education loan involves other influences such as enhancing accessibility of needy students can collect the funds to pay for education (Ziderman, 2013); human capital development (Avery & Turner, 2012; Becker, 1975; Li, 2013; Mueller & Rockerbie, 2004); financial sustainability of higher education institutions (Mussa, 2015; Ziderman, 2013)
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