What is the ruling of Islamic Sharia on the financial sums awarded as compensation to students from a private institute that was shut down? Are these sums permissible (halal) or forbidden (haram)? And what is the ruling specifically on my money, given that I left my studies before the shutdown?
The fees paid by a student upon registration at an institute are considered a wage in exchange for the institute providing teachers and study facilities. The institute is entitled to the full wage if it fulfills its agreed-upon work. If it does not fulfill it, the details are governed by the concluded contract or prevailing custom. As for a student who voluntarily left their studies before the institute was dissolved, they are not entitled to any compensation. Compensation is only for fees and expenses paid from which no benefit was realized; anything else must be returned to the institute. As for the lawyer's fee, it must be known. Agreeing on a percentage of unknown compensation makes their fee unknown, and therefore, the lawyer is only entitled to a fair wage (اجرة المثل).
Summarized from the full answer at Ftawy · reviewed Sep 2, 2026
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