Unveiling the Benefits of Cash Waqf in Higher Education Financing: Empirical Study Reveals Social and Economic Impacts in Malaysia

Unveiling the Benefits of Cash Waqf in Higher Education Financing: Empirical Study Reveals Social and Economic Impacts in Malaysia. This study analyzes the effectiveness of cash waqf as an instrument of higher education financing in Malaysia. Through data from waqf institutions and universities, the study found that cash waqf not only reduces the financial burden of students but also increases access to quality education, contributing to human capital development and poverty reduction. The findings strengthen the argument that cash waqf is a relevant Islamic economic mechanism in addressing education inequality.. Introduction to Cash Waqf Cash waqf is an Islamic economic instrument that has been practiced since the time of the Prophet Muhammad. Traditionally, waqf takes the form of immovable assets such as land and buildings. However, in modern times, cash waqf has emerged as an innovation that allows donations in the form of ringgit to be managed productively. In Malaysia, institutions such as the Federal Territory Islamic Council MAIWP and the Malaysian Waqf Foundation have pioneered the implementation of cash waqf, particularly in the higher education sector. This study aims to evaluate the social and economic impacts of cash waqf on higher education financing in Malaysia. Methodology This study employed a mixed-methods approach. Primary data were collected through surveys of 500 waqf cash scholarship recipients at three public universities: the University of Malaya UM , the International Islamic University Malaysia IIUM , and the University of Technology Malaysia UTM . Secondary data were obtained from MAIWP's annual reports and the Ministry of Higher Education. Regression analysis was used to measure the relationship between cash waqf financing and academic achievement and student dropout rates. The study was published in the Journal of Islamic Economics, Banking and Finance in 2022. Main Findings: Impact on Education Access The study found that 78% of respondents stated that cash waqf enabled them to pursue higher education without incurring significant debt. The dropout rate among cash waqf recipients was 3.2%, significantly lower than the national average of 8.5%. This suggests that cash waqf is effective in reducing financial barriers that often lead to students dropping out. Additionally, the average monthly expenditure of cash waqf recipients was RM3,450, higher than the average university expenditure of RM3,100, indicating that financial stability enables students to focus on their studies. Economic and Social Analysis From an economic perspective, every ringgit donated to cash waqf generates a social return of RM2.80 in the form of increased graduate income and reduced social costs due to dropout. This study used the Social Return on Investment SROI method developed by The SROI Network. Over a five-year period, cash waqf graduates were reported to have earned 25% higher starting salaries than non-recipients. This directly contributes to increased household income and poverty reduction. From a social perspective, cash waqf fosters a spirit of mutual aid and ummah solidarity, as funds are collected from various segments of society and distributed fairly. Policy Implications and Conclusion This study provides empirical evidence that cash waqf is a forward-thinking instrument for financing higher education in Malaysia. The government and waqf institutions are recommended to expand the scope of cash waqf by establishing a digital platform to facilitate donations. Furthermore, the management of waqf funds must be conducted professionally and transparently to ensure long-term effectiveness. In conclusion, cash waqf not only meets Shariah requirements but also addresses contemporary social issues such as education inequality and poverty. This demonstrates that Islam has a complete and relevant economic system for all ages.