"I couldn't take out the student loan because of the Muslim laws against interest," he says. "I had offers from elsewhere, but I couldn't afford to go out of Leicester, my home town. I worked. Especially during the holidays, but during term time as well."

His brother is due to start university next year, and the year after another brother will be ready. They won't take out a student loan either because under the Islamic Sharia laws it is not allowed.

Ibrahim Mogra is a religious scholar and chairman of the mosque and community affairs committee of the Muslim Council of Britain. He says: "Regardless of whether a loan is for buying a property or getting a degree, it's the interest that's prohibited.

"The prohibition comes from the teachings of the Koran, where it states clearly that God has made permissible trade and commerce, but has prohibited interest. You can't increase your wealth by taking advantage of those who are less well off, interest is an example of that," he explains.

So how is it affecting Muslim students?

Hasan Salim Patel, an executive member of the Federation of Student Islamic Societies, says the dilemma is changing student behaviour. "This is affecting some of the poorest people from Pakistani, Bangladeshi and Somalian communities," he says.

"Students aren't so much being put off going to university, but it makes it harder. They stay at home more and take more time off to save, but in ways it makes them more determined and resolute."

Anne Campbell, Labour MP for Cambridge, agrees. A champion of university widening participation schemes, she believes students who are forced to chose between staying at home and taking out a student loan against their beliefs will opt for the home option, and possibly miss out on a place at the best universities, such as Cambridge.

In a letter sent to Charles Clarke, the education secretary, this week, seen by EducationGuardian.co.uk, Ms Campbell has asked the government to consider ways of getting round the problem. She proposes a graduate endowment option - similar to that used in Scotland - which students would pay off without added interest after graduation through the tax system. The endowment would go into a fund to pay for future generations of student support.

Ms Campbell writes: "This would need discussion with Muslim communities to ensure that it would not be considered as a loan. I was inspired to think along these lines following the proposal to set up a method of financing house purchase for Muslims who do not wish to take out a mortgage."

The National Union of Students is taking the message on board as well. Michelle Codrington, its black students officer, says the problem is likely to escalate under the government's future proposals for funding. "A lot more students are going into debt and this is directly impacting on the Muslim student community. We foresee that more and more Muslim families are going to have to choose which of their children go to university. It's something I will raise with ministers. It plays a huge role in restricting aspirations in the black communities have. It's on our agenda."

The problem is familiar in other sectors. This month, the HSBC became the first high street bank to provide an interest free mortgage system that conforms to Islamic law. Their system, the ijara loan, means that the bank buys the house and the customer rents it off the bank until the full amount is repaid, plus a profit. Other specialist banks offer a murahaba version, where the bank buys the house, but customers buy it back over time. In both cases only the capital is repaid, curtailing the problem of paying interest. In his last Budget, the chancellor Gordon Brown made Islamic mortgages easier by allowing them to charge a stamp duty only once, rather than with every instalment.

A spokesman for the Department for Education and Skills said: "The government is naturally concerned that some Muslims may be missing out on the benefits of higher education because they feel unable to take out student loans, which is against the principles of Sharia law. But student loans do not attract interest in the commercial sense. Students only pay back what they borrow in real terms. "If a Muslim student wishes to finance his or her higher education by taking out an alternative loan from a Muslim bank, one that complies with a strict interpretation of Sharia law on interest charges, then he/she is free to do so. Alternatively, those who do not want to take out a loan, or those who want to keep the loan to a minimum, have the opportunity to pay some or all of their fees upfront. "The decision on whether to take out a student loan is for the individual and many Muslim students already take out these loans."

Hasan Salim Patel isn't convinced, and offers another suggestion: "A graduate tax would be different - a mechanism to get round that." Or better still. "Make it easier for all students. Make it cheaper."