Weekly payday roundup: 7 days ended 1 mar 2013:
Well, it’s official: the University of East London has cemented itself as my favourite institute of higher learning after banning all payday loan adverts.
It’s also the only university in the UK to do so, which is even more reason to rejoice: finally someone’s standing up for university students and taking steps to prevent payday advance lenders such as Wonga and QuickQuid from preying upon younger Brits that both have need of extra cash and lack the world experience to necessarily know how pernicious payday lending can be. Payday loans often boast massively high annualised interest rates – Wonga can charge as much as 4,214 per cent APR, after all – and while payday lenders object at using an APR to represent a loan that lasts only a few weeks at most, the cost is still incredibly high, even if you manage to repay a payday loan on time and without incurring any late fees.
Out of its 28,000 students, UEL said 2,000 of them had dependent children, and the National Union of Students says that these types of students are one of the most likely to end up being ensnared by a payday lender. This was the main impetus behind the university’s decision to launch heir anti-payday lending campaign, said one UEL spokesman, and the vice president for the National Union of Students was very gratified to hear about the announcement.
Peter Mercer, the vice president for NUS, said that payday lenders like to pass themselves off as a viable alternative to a student loan, but you shouldn’t be fooled by this. Short term loans almost always do nothing except make matters worse when it comes to debt, Mr Mercer added, and with so many disreputable lenders out there specifically targeting low income earners and students, taking steps to eliminate adverts for their services from university campuses across the UK will help stave off dangerous levels of debt.
And let’s face it: debt problems in the UK are getting worse. You don’t need me to tell you that, as all you need to do is look at how many people have been contacting National Debtline.
In fact, a news report I read this week said that there were nearly twice the number of payday loan-related debt troubles addressed by National Debtline in 2012 than there were the previous year. Specifically, the number of payday loan calls fielded by the free advice service increased by 94 per cent to 20,013 – and that if you looked at 2007 figures, the number of callers with payday loan debt had gone up an absolutely staggering 4,200 per cent!