Distributing Zakatu Kasbil 'Amal as an Alternative to Student Funding, Evidence in Indonesia’s Universities

Background Rising tuition costs and unequal access to higher education have prompted Indonesian universities to explore Zakat-based funding models to support needy students. In contrast, the use of Zakat on income (Zakatu kasbil ‘amal) and the Fisabilillah category for scholarships has been increasingly practiced; their implementation remains shaped by theological debates and institutional innovations. This study examines how universities integrate fatwa-driven legitimacy with Zakat governance to mobilize Zakat and expand student support systems. Method This study combines a systematic literature review with an exploratory qualitative approach. Academic publications, Scopus-indexed articles, national regulations, institutional reports, and relevant fatwas were analyzed to examine how theological perspectives and institutional practices interact in mobilizing Zakat for student funding. Evidence from university cases contextualized findings, such as PUSPAS UNAIR, UPZ UIN Sumatera Utara, BAZNAS, and LAZISMU. Result The findings reveal two applied contributions. First, Zakat on income has been institutionalized by universities through various mechanisms, including establishing Unit Pengumpul Zakat (UPZ), forming private Zakat Institutions or collaborating with BAZNAS and LAZISMU. Supported by Indonesian Ulema Council Fatwa No. 3/2003, these institutional models embed auto-debit payroll systems and structured governance processes, transforming Zakat on income into a sustainable funding source for student scholarships. Second, universities expand the use of the Fisabilillah category as a legitimate asnaf for distributing Zakat-based scholarships. While classical scholars traditionally limit Fisabilillah to battle-related jihad, contemporary fatwas, including Indonesian Ulema Council Fatwa No. 120/1996, Dar al-Ifta Egypt (2007), and Jordan’s Fatwa No. 2847 (2013), permit allocating Zakat to education when it serves the collective benefit. Universities operationalize this broader fiqh application through structured programs such as the BAZNAS Scholarship Institute, LAZISMU’s scholarship schemes, and university-managed funding initiatives.