Dr Tim Hall, head of Global Sciences, UEL, is fighting payday loan companies taking advantage of students
PUBLISHED: 09:00 15 February 2017
Last week I joined colleagues and students from the University of East London and the London Design and Engineering UTC to protest two adverts from the payday loan company Smart Pig at Cyprus DLR Station.
Smart Pig specifically target students in their marketing campaigns offering short term loans and student overdrafts. The aim of the protest was to call on Transport for London to take the adverts down.
The University of East London serves some of the most disadvantaged communities in the country and has long had a problem with payday loan companies. Research undertaken by myself and Alice Sampson in 2014 found as many as 10 per cent of our students financing their way through their studies on payday loans. In almost all of the cases that we looked at we found that students were using these as emergency loans – where no other source of credit was available - and getting caught in spirals of debt with predictable consequences on their ability to study and perform well.
As a consequence UEL took the unprecedented decision to ban all advertising from payday lenders on its campuses. This was reported in the national press and sent a strong signal that the practices of these lenders were unacceptable. Shortly after this the government announced a cap on payday lenders in 2015 to limit the amount they could charge to 100pc of the original loan and prevented them from ‘rolling over’ loans.
While the cap has curbed the worst excesses of the payday loan industry it remains the case that these products can cause harm - charging as much for borrowing £100 for a month as a credit card charges for borrowing the same amount in a year. Why should students be charged more for credit than anyone else? They are already the first generation to have to wholly fund their studies from student loans. Why should we stand by and watch them be ‘rinsed’ by predatory lenders on their journey?
It is unacceptable and local and central government should act not just to protect students from these lenders but ensure they have access to ethical alternatives.
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