Islamic Principles in Education Financing: Challenges and Strategic Solutions for Madrasahs in Indonesia

Education financing is a critical factor in ensuring the quality, equity, and sustainability of Islamic educational institutions. This study explores education financing management based on Islamic values, focusing on classical models such as the Bait al-Mâl system used during the Islamic caliphates. Employing a qualitative, literature-based approach, the study analyzes classical Islamic perspectives and compares them with the current financing challenges faced by Islamic institutions in Indonesia. The findings reveal that historically, Islamic education was fully state-funded through structured mechanisms, emphasizing transparency, collective responsibility, and equitable access. In contrast, modern Islamic schools, especially madrasas, often face financial constraints due to limited funding sources and weak community participation. This study recommends revitalizing Islamic education financing by integrating historical best practices with modern financial management strategies, including the use of waqf, zakât, and stakeholder collaboration. Aligning Islamic ethical principles with effective financial management can improve institutional resilience and promote educational inclusivity.