What is the ruling on the late payment fine imposed by the university on students who are late in paying tuition fees?

Deferred tuition fees are a debt upon the student, and the university is not permitted to compel him to pay a late payment fine, because it is usury (riba), which is forbidden by Islamic law. The Islamic Fiqh Academy has unanimously agreed that the condition of a late payment fine is void and forbidden.

If the student who is late in payment is procrastinating, his case should be referred to the responsible authorities to compel him to pay. If he is in financial difficulty, he must be granted a respite until he finds ease, or the debt should be given to him as charity, according to the Almighty’s saying: "And if there is one in [financial] difficulty, then [let there be] a respite until [a time of] ease. But if you give [from your right as] charity, it is better for you, if you only knew." Therefore, it is not permissible to take a fine from one in financial difficulty; rather, he should be assisted and encouraged to seek knowledge.