Sheikh Ahmad Kutty, a senior lecturer and Islamic scholar at the Islamic Institute of Toronto, Ontario, Canada, states: “Students are allowed to take the student’s loan. A still better alternative is to try to get a stipend or bursary, which is not at all impossible to obtain if you are diligent in your academic work.
The Prophet (peace and blessings be upon him) taught us that whoever wishes to keep himself chaste, pure and free from sins, Allah will surely help him to do so.
So, formulate sincere intention to avoid interest payment, work hard and seek help from Allah, and Allah will help you. Allah says, “Whoever fears Allah, Allah will surely make things easy for him.” (At-Talaq: 4)
To conclude: If you tried your best to keep the loan to a minimum and strove to pay it within the period, you have done what is possible for you. If, for reasons beyond your control or means, you could not pay all of them on time, then Allah knows your circumstances; so ask forgiveness of Him, for He is Forgiving and Merciful. I wish you all the success in your studies. Pray to Allah always making use of the following supplication:
Allaahumma aghninee bi halaalika `an haraamika wa bi ta`atika `an ma`siyatika wa bi fadlika `amman siwaaka
(O Allah, make me self-sufficient with that which is halal (lawful) so that I am not compelled to go for what is haram (unlawful); make me self-sufficient with obedience to You so that I am not led to disobedience; make me self-sufficient with Your favor so that I do not need to look to favor from others!)”