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UEL pays no interest to payday loan companies

Thursday 28 February 2013

Payday loan

The University of East London (UEL) has launched a bold new campaign warning its students about the hidden perils of unscrupulous payday loan companies.

Given there are 2,000 students at UEL with dependent children – a group commonly targeted by payday loan companies - the University has taken the landmark decision to ban all payday loan advertising and promotional materials at its campuses – a move that could be heralded as a first by any UK university.

As part of the campaign, UEL has teamed up with the National Union of Students (NUS) and Movement for Change – an organisation that lobbies for a cap on the amount of interest payday lenders can charge.

In a recent report, the NUS unearthed widespread evidence concerning the use of short term loans by students in the UK. In addition, the report also found certain groups were more susceptible to the lure of payday loans, with one in ten student parents having taken out a cash advance from a high street lender at some point during their studies.

Nicole Redman, Head of Student Money Advice & Rights Team (SMART), said: “Our advice to students is to try and avoid the temptation of a payday loan at all costs. While it might seem like an ideal solution in the short term, the long term repercussions can be very serious, with students finding themselves in a vicious circle of insurmountable debt.

If a student is experiencing any financial difficulties, we would strongly encourage them to get in touch with the SMART team. We will always do our utmost to try and advise students about what the safe and practical alternatives are.”

Speaking at the campaign launch, Peter Mercer, NUS Vice President said: “Payday lenders try to present themselves as some kind of alternative to government-backed student loans but in reality short-term borrowing often makes students’ financial situation worse rather than better. Unscrupulous lenders targeting vulnerable students and other low earners need to be controlled and I am really pleased UEL has launched this campaign, which will help protect its students against the plethora of payday lenders we now see operating within our local communities, high streets and on the internet.

“Students waiting for their next loan payment and scraping around for money to pay bills might be tempted by adverts that present a supposedly painless and easy solution. Down the line when interest racks up, it can be difficult to pay back and many borrowers end up in a cycle of snowballing loans taken out to pay off previous debts.”

 

Notes to Editors

The University of East London (UEL) is a global learning community with over 28,000 students from over 120 countries world-wide. Our vision is to achieve recognition, both nationally and internationally, as a successful and inclusive regional university proud of its diversity, committed to new modes of learning which focus on students and enhance their employability, and renowned for our contribution to social, cultural and economic development, especially through our research and scholarship. We have a strong track-record in widening participation and working with industry.

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