Question
What is the ruling on paying zakat on student loans? For example, let’s say I pay zakat every Ramadan. So in 2026, I would pay it in the last 10 days of Ramadan in March. In September of 2025 the government gives me $10,000. I use it to pay my tuition for the first semester, so I no longer have it in my possession. In January 2026, the government disperses another $10,000 in my account and I use it to pay my 2nd semester tuition. Ramadan rolls around and I have for example $14,000 in my bank account and $20,000 of student loan debt. Do I only pay zakat on the $14,000 or on $34,000?
Answer
Zakat is only due on wealth that you actually possess and control on your zakat due date. The money that was already used for tuition before Ramadan is no longer in your ownership, so it is not zakatable. When Ramadan arrives, you look at what remains in your possession.
In your example:
- The $10,000 received in September 2025 and spent on tuition is not included in zakat, since it no longer exists.
- The $10,000 received in January 2026 and used for tuition is also no longer in your possession, so it is not included.
- What you still have in your account at Ramadan 2026 ($14,000) is what zakat is due on, provided it is above the nisab.
As for the $20,000 of student loan debt: most scholars hold that long-term debts like student loans do not fully offset zakat. Zakat is not waived simply because you owe a large student loan, since it is paid gradually over years, not due in a lump sum. Therefore, you would still pay zakat on the $14,000 you own at Ramadan, not on $34,000, and not reduced by the long-term loan amount.
Final Ruling: You pay zakat only on the $14,000 in your possession at Ramadan, if it is above the nisab.
And Allah knows best.