Is a university scholarship grant for outstanding students, which is free of interest and raises the university's ranking, considered a loan that draws benefit, and thus usury (riba)?
Source: FtawySummarized from the full answer at Ftawy · imported Sep 2, 2026
If the scholarships are a loan that is repaid with a stipulated increase, then it is prohibited usury (riba). However, if it is a benevolent loan () repaid without an increase, then it is permissible. The university's benefit does not prohibit the loan, for the prohibited benefit is that which is stipulated in the loan contract. Ibn Abd al-Barr said: "Every increase in a loan, or benefit that the lender gains, is usury, even if it were a handful of fodder. And that is forbidden if it was stipulated."
Summarized from the full answer at Ftawy · imported
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