Can Zakat Be Used to Pay Student Loan Debt?

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The Short Answer

Yes, but there is a vital caution here not to confuse eligibility for receiving Zakat for qualified student debt with assessing and paying your due Zakat (see below). Proceeding in ignorance of Islam’s Law (fiqh) does not safeguard you against sin and its divine penalty.

How do we know debtors can receive Zakat?

The Quran explicitly identifies “the debt-ridden” as the Sixth of the Eight Divinely Designated Categories of people entitled to Zakat 

“Indeed, prescribed charitable offerings are only to be given to the poor and the indigent, and to those who work on administering it, and to those whose hearts are to be reconciled, and to free those in bondage, and to the debt-ridden, and for the cause of God, and to the wayfarer. This is an obligation from Allah. And Allah is all-knowing, all-wise.” (Surat Al-Tawbah, 9:60)

It specifies the eight exclusive categories of people that can receive Zakat, and no one can add or subtract from this list of Zakat-eligible recipients, not even a prophet, as the Prophet, on him be peace, stated to us:

“Allah permitted not even a prophet to adjudge Zakat[-worthiness]. Rather, He Himself ruled on it and permitted it in eight cases. …” (Abu Dawud)

This divinely revealed sign-verse (ayah) of the Quran delimited Zakat’s eligible recipients after Zakat was instituted in the second year (2 h) after the hijrah migration of the Prophet, on him be peace, from Makkah to Madinah with the revealed commandment to the Prophet, on him be peace, directing him to institute Zakat on Muslims, making it the Third of Islam’s Five Pillars:

Take from their wealth a charitable offering to cleanse them and purify them thereby. Moreover, pray for them. Indeed, your prayer is a comfort to them. For God is all-hearing, all-knowing. (Surat Al-Tawbah, 9:103)

(For details on the eight Zakat-eligible categories of recipients, see What Is Zakat?)

(Note that the Arabic of both these verses that lay down the obligations of Zakat use the word ‘sadaqah’ (pl. ‘sadaqat’) in its meaning of Zakat, which is a primary meaning of the word ‘sadaqah’ in the Quran, as this names the divine category of charity, of which Zakat is a specialized obligatory yearly alms form, which is why it is translated here as “prescribed charitable offering(s).” For more on the linguistic meanings of the Arabic words ‘Zakat’ and ‘sadaqah’ see What Is the Difference Between Zakat and Sadaqah?)

What are the conditions to receive Zakat to pay school debt?

As for Zakat’s use in paying student loan debt, all debt that meets four qualifications can be paid with Zakat:

  1. need: The debtor lacks the wealth to pay off the debt

  2. legality: The debt has been incurred by lawful means and for lawful uses, according to Islam’s precepts and rulings

  3. immediacy: the debt has come due (though there are varying scholarly definitions and conditions for this stipulation)

  4. human agency: the debt is owed to people not to God (as an expiation penalty, such as an obligatory kaffarah payment for a violation, like breaking an oath

(For a detailed explanation of these conditions and debt see Can Zakat Be Used to Pay Debts?)

What is the warning about student loan debt and Zakat?

Long-term loans do not preempt due Zakat, as their totals cannot be deducted from a Zakat payer’s yearly wealth assessment of any Zakat-eligible wealth-type.

In other words, if you have $10,000 in personal wealth and assets in the form of currency (from all your currency sources – cash, accounts, financial instruments, etc. – added together) at the time of your Zakat Due Date and this amount exceeds the established Zakat threshold of nisab for this type of wealth (the equivalent monetary value of 85 grams of gold), you cannot subtract your total student loan debt from that $10,000 accumulation during your Zakat period of that year (hawl).

You can only subtract the portion of the student loan payment due at that time from your total yearly currency wealth accumulation. Then you pay 2.5% in Zakat on whatever your total currency amount is, provided it remains above the set nisab threshold (value of 85 grams of gold) for that type of wealth.

As such, student loans, as with mortgage loans and other long-term debts, cannot be deducted from one’s wealth in total when assessing one’s due Zakat – unless they are due in total immediately.

This is in regard to assessing and calculating one’s due Zakat, which is distinct from the various scholarly legal opinions on receiving Zakat for debt payment as to how much of that debt can be considered immediate in terms of time and amount restrictions.

For details about the prohibition against deducting student loans from one’s yearly wealth for Zakat assessment, see Can Student Loans Be Deducted from Zakat as Debt?

To understand why obligations against future income or wealth are not considered Zakat-eligible debt, see Can Home Mortgages Be Deducted from Zakat as Debt?

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