UEL said the ban
had been imposed because more students were using payday loans to tide
themselves over between grants and student loans.
Rev Jude Drummond, the chaplain, said: “We see people at particular times of year in very distressed and emotional states. They’ve no idea where to go and people are leaving their studies because of financial difficulties.”
She added: “It leads to desperate measures. In this area we’ve got a lot of crime and social problems. There’s a lot of people on the streets who are there because of money worries. There’s evidence of people having to turn to sex work because they can’t makes ends meet.”
Payday loans are based on repayment at a certain time, but borrowers face annual interest rates of more than 4,000 per cent. The new Archbishop of Canterbury, Justin Welby, described such loan businesses as “usury”.
UEL students — some of who are among the most deprived in the capital or have families to support — are being advised to seek alternatives such as debt counselling or credit unions. Social sciences lecturer Tim Hall said UEL was even looking at blocking access to payday loan websites.
The drive is backed by the National Union of Students, which lobbies for a cap on the amount lenders charge.
Nicole Redman, head of UEL’s Student Money Advice & Rights Team (SMART), said: “We have more than 2,000 student-parents at UEL and a lot of them who take these loans are using the money to feed their children. It starts off with £100, but that soon escalates to £500, £600 or £700 when they can’t pay it back.”
But the trade body representing loan firms such as Wonga, QuickQuid and Payday UK said students should not use such services to “fix larger, long-term debt problems”.
Russell Hamblin-Boone, chief executive of the Consumer Finance Association, said that unless students work to earn money alongside their course, it is “highly unlikely that a payday loan would be right for their needs”.
The 31-year-old student from Waltham Forest went to The Money Shop in East Ham to borrow £400.
She said: “I couldn’t get a second student loan and I had the final demand for my tuition fees. I was desperate and needed to be able to make some money to survive the summer.” Ms Downs was asked to write five £100 post-dated cheques.
The first cleared but the second bounced. She said the firm offered to extend her loan and she became “trapped” — with the debt spiralling to £900. She said: “I kept having to borrow more to pay it off, it became this cycle.”
Ms Downs, who has since borrowed money from her parents and found part-time work, added: “I would advise anyone in my position to seek all other alternatives.” The Money Shop said it did “not accept the version of events as presented”.
Source
banzai7
Rev Jude Drummond, the chaplain, said: “We see people at particular times of year in very distressed and emotional states. They’ve no idea where to go and people are leaving their studies because of financial difficulties.”
She added: “It leads to desperate measures. In this area we’ve got a lot of crime and social problems. There’s a lot of people on the streets who are there because of money worries. There’s evidence of people having to turn to sex work because they can’t makes ends meet.”
Payday loans are based on repayment at a certain time, but borrowers face annual interest rates of more than 4,000 per cent. The new Archbishop of Canterbury, Justin Welby, described such loan businesses as “usury”.
UEL students — some of who are among the most deprived in the capital or have families to support — are being advised to seek alternatives such as debt counselling or credit unions. Social sciences lecturer Tim Hall said UEL was even looking at blocking access to payday loan websites.
The drive is backed by the National Union of Students, which lobbies for a cap on the amount lenders charge.
Nicole Redman, head of UEL’s Student Money Advice & Rights Team (SMART), said: “We have more than 2,000 student-parents at UEL and a lot of them who take these loans are using the money to feed their children. It starts off with £100, but that soon escalates to £500, £600 or £700 when they can’t pay it back.”
But the trade body representing loan firms such as Wonga, QuickQuid and Payday UK said students should not use such services to “fix larger, long-term debt problems”.
Russell Hamblin-Boone, chief executive of the Consumer Finance Association, said that unless students work to earn money alongside their course, it is “highly unlikely that a payday loan would be right for their needs”.
'I was trapped in vicious cycle'
NATALIE Downs was £1,000 overdrawn and needed money for food and travel over the summer when she turned to a loan firm.The 31-year-old student from Waltham Forest went to The Money Shop in East Ham to borrow £400.
She said: “I couldn’t get a second student loan and I had the final demand for my tuition fees. I was desperate and needed to be able to make some money to survive the summer.” Ms Downs was asked to write five £100 post-dated cheques.
The first cleared but the second bounced. She said the firm offered to extend her loan and she became “trapped” — with the debt spiralling to £900. She said: “I kept having to borrow more to pay it off, it became this cycle.”
Ms Downs, who has since borrowed money from her parents and found part-time work, added: “I would advise anyone in my position to seek all other alternatives.” The Money Shop said it did “not accept the version of events as presented”.
Source
banzai7
including reasonable comments here... many benefits
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