Is it permissible to donate money acquired from an interest-bearing loan to a school specializing in teaching the Quran?

If a person takes out an interest-based loan and receives an increase on the principal, he must return this increase to its owner upon repentance, and he is only entitled to his principal. If it is impossible to return it to its owner or his heirs, then it is obligatory to dispose of it by giving it to the poor and needy or for general Muslim welfare.

If the owner of the increase is a specific person and it is possible to return it to him or his heirs, then he must do so, because it is his property. Ownership is not transferred by prohibited interest.