QA-ID-0053
QUESTION
As an addition to your post about different zakat deductibles in modern life, can you clarify whether Student Loans count as a long term loan or not and whether they would be treated the same as the long term loans to companies and banks mentioned in your post.
ANSWER
﷽
Student loans in the UK are categorised as long term debts that are owed to a company and not an individual. As such, the entire loan amount is not fully deductible from the total calculation for zakāt. Repayment is only required once a person’s income reaches a specific threshold, and even then, only a certain percentage of income above that threshold is payable monthly. The remaining loan is eventually written off after 30 years and is not demandable.
If an individual has started repayment, they can deduct the installments payable until the next zakāt date (subtracting any interest element). Those who have not commenced repayment cannot deduct any amount from their zakāt calculation.
والله تعالى أعلم
And Allāh Knows Best
Muhammad Kalim Misbahi
