Students in the United States face more than one trillion dollars in student loans. As the cost of a college education continues to grow, more young twenty somethings find themselves struggling to find employment with tens of thousands of dollars in debt. Despite the statistical fact that a college education is a good investment over the course of one’s lifetime, the prospect of crushing debt drives some away from traditional college educations all together.
For those who can’t afford to pay for college, but decide to attend it, the prospects of a prosperous life after graduation can often be delayed by a decade. Even with financial aid and loan options, interest rates can mean big fees.
Scholarships provide students with money they are not required to pay back but must earn through distinguished academic or athletic accomplishments. While some scholarships are aimed at the underprivileged, many in need are forced to turn to high interest loans. For those who receive well paying jobs out of college, repaying loans may not be a problem but for the reported 50% of graduates who are unemployed or underemployed, the price of their four years of education can cost them a lifetime of financial stress.
In response the growing student debt as well as in line with the Islamic principle of avoiding interest, The Islamic Society of North America and the Islamic Development Bank created a unique interest-free loans option for college students
The loans are offered as fifteen thousand dollar annual scholarships to college students enrolled or intending to enroll in medical sciences or engineering. The money is then repaid by the student, without interest, to the scholarship fund in installments thus replenishing the fund for future loans.
Applicants eligible for the scholarship must have show both academic success as well as financial need.
While these loans are particularly lucrative for Muslim students who are seeking interest-free options to finance their increasingly costly educations, even those without religious obligation to avoid interest payments find that the option is far more practical and plausible for them as well.
Other faith-based groups, as well as individual foundations have begun to provide interest-free loans to students, such as the International Association of Hebrew Free Loans. Though some loans are restricted by geographical region, others like The Bill Raskob Foundation offer interest free loans to students around the country.
With a new class of incoming college freshman around the corner, this generation of students may find scholarship and loan applications more valuable than their college applications.