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Al Salam Alaikoum!

Briefly, I will try to address your points as under:

1. Islamic Banking and Finance functions on rules defined in the “contract of Sarf” in Fiqh (Islamic Law), these rules practically forbid fixed term loan contracts, only Qard Hasan is allowed which is not time-bound. For example, as per present Islamic Law you are not permitted to ask your friend / colleague in your office to lend you 100 bucks with a promise to return him on the first of next month when you will get your pay, this is not allowed in Islamic Law.
2. This is not only unrealistic, unnatural and unbelievable position but also it is contradicting with Quran (02:282) since a debt of fixed term (dayn, as described in the verse) can be established either from a loan or deferred payment sale and Quran does not distinguish or specify or exclude any mode of debt, there is also no explicit Shariah evidence exist to verify the Sarf rules based on perceptive interpretation of one hadith. I am not going in details of how this contradiction could come up in the first place when the Quranic command was already there, can’t cover it here but hopefully plan to give my particular point of view in a separate write-up, insha’ALLAH.
3. My well thought-out concluded position is that Islamically loans with fixed term do have one valid form for contracts even for commercial purposes.
4. Next comes the issue of interest/riba in such fixed term loan contracts, I have defined riba after all such considerations where the demarcation whether a loan contract contain riba/interest in it or not will be defined by the “forced” factor that is based on reality (mean real course of the contract and the situation of debtor) and not artificial imposition of extra liability.
5. So I believe that I can enter in to a mortgage contract devised on loan method, the additional amount charged on top of loan whether you call it interest, mark-up, or profit is not prohibited since actual sale is happening first and secondly such additional amount as put-on here are already allowed in Fiqh/Islam in case of deferred payment sale where price is increased.
6. It is my belief and my sincere arguments therefore I am not confused but yes I agree with you that generally confusion persist due to the tussle between faith and fear.
7. You are asking what issue of Riba is not settled – the one mentioned above, i.e., loans are not allowed in present Islamic Law. Firstly, loans must be allowed in Islamic Law since the Fiqh position is in conflict with Quran and it must be corrected. Secondly, Riba naturally will have to be redefined after this correction in Islamic Law.
8. If loan contracts are allowed in Islamic Law and Riba is redefined, only then students’ loan would be possible by law and that loan would certainly have a different form than the present conventional banking loan practices, it means - even then no such form of loan contract i.e., "loan + banking interest" would be allowed islamically, considering the reality and the non-existence of the "forced" conditions would be must in islamic loan forms of the future.

Al Salam Alaikoum!

I will make three part of your posting to respond accordingly:

#1:
Paying Interest : Since you are asking for a ruling that forbids paying of interest, here is one hadith that clearly answers your question:

Jabir said that Allah's Messenger (may peace be upon him) cursed the accepter of interest and its payer, and one who records it, and the two witnesses, and he said: They are all equal. Reference - Muslim :: Book 10 : Hadith 3881 - Link Here

#2:
Buying house against mortgage : Islam is not only for Islamic Banks but for all muslims, if you find a solution/deal confirming to your Islamic beliefs from a conventional bank (most probably that would be similar to one offered by an Islamic Bank, mark-up or profit instead of interest) then there is no reason why you can’t avail that one. In the contracts of sales, rents, this is quite possible. In my view, the only concern here is the charging of interest on late payments either in the name of interest or fine that Islamic Banks charges and claim to give it to charities which is not justified even for the good work of charity, this can’t be enforced as principle.

#3:
Loans for Education : this is an acute issue, can’t be answered because of two primary reasons, firstly the issue of riba not yet settled and secondly the implementation of Islamic doctrine in whole where education shall become the responsibility of the government.