What is the ruling on a stipulated financial increase imposed on a student in a scholarship contract in the event of their breach of conditions, is it considered usury (riba), is the contract valid, and what is the Shariah-compliant action for the student in this situation?
Source: FtawySummarized from the full answer at Ftawy · imported Sep 2, 2026
It is permissible for the granting entity to stipulate the recovery of study expenses from the scholarship student if he does not adhere to the conditions that are Islamically sound. However, stipulating the repayment of expenses with an increase of 50% is not Islamically acceptable, involves clear deception (), and entering into such a contract is forbidden. For someone who has already concluded such an agreement, if he can annul it, he should do so. Otherwise, he should strive to adhere to the conditions to avoid wronging the granting entity.
Summarized from the full answer at Ftawy · imported
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