Interest on a Loan for Education
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Question
The Ministry of Education grants loans to students studying teaching through Discount Bank. If the student subsequently engages in teaching, the loan becomes a gift. If not, he must repay it with interest resulting from indexation. An avrech borrowed the money for his father-in-law to purchase an apartment for the couple, and they did not make a heter iska between them. What should they do now?
Answer
His father-in-law repays the principal, and he repays the interest.
Source
Taz, Siman 170, Sif-Katan 3 and Tiferet Le-Moshe there