I am a Muslim student living in Norway, studying in university there. I have a question about student loans given by the university. This loan is interest-free, and it is given to students, and if the students pass the half-year exam, the loan is turned into a grant or gift from the university, but if they do not pass the exam, it remains as an interest-free loan until the end-of-year exam. But if a student leaves or graduates, or if the loan is not turned into a grant or gift from the university, it becomes a debt, and in these three cases, interest is to be paid on the loan.
My question is: is it permissible for me to avail myself of this loan? Is it halal? Because I am going to complete my studies this year, and by Allah’s grace I did not fail in any year at all, and it will never happen, by Allah’s leave, in the future.
Therefore, if I take this loan, it will turn into a grant, in sha Allah, and if I fail in any exam or stop studying, praise be to Allah I have money to pay off this loan immediately. I am not in need of this loan, but because it will turn into a grant after the exam, I want to take it. What is the Islamic ruling on this matter?