The exposure of students to ‘payday’ lenders; challenging predatory lending and developing alternative solutions

A recent report by the National Union of Students (NUS, 2012) found significant levels of anxiety over day to day living costs and future levels of debt. These were particularly pronounced for vulnerable groups with 67% of student parents worrying about not having enough money to cover basic living costs. As university lecturers involved in the pastoral care of our students, working at an institution situated in one of the poorest boroughs in London, we are reminded on an almost daily basis of the financial pressures students are under whether this takes the form arriving late to class in order to avoid the peak train fare or students going without core books in an attempt to save money. We have also found ourselves, on more than one occasion, fielding absurd and tragic questions like whether house repossession or moving into a shelter represents grounds for an extension. While our university like many has excellent support services run by dedicated staff it is increasingly difficult to refer students to the appropriate service and refocus on the academic without further ado. This study originates from these experiences of working with increasingly indebted students at the University of East London (UEL). At a meeting in January 2013, students and staff from different sectors of the university (academic, administrative, money advice teams, university chaplaincy and student unions) shared anecdotal evidence of their widespread use on the campus. This convinced us of the need to launch a campaign and to conduct research into the extent and consequences of the use by of payday loans by students and how best to respond. The following paper describes early findings from an on-going research study. The paper draws on existing studies before presenting the results from a survey of students at UEL and interviews with students who have taken out a crisis loan. Drawing on the findings, possible preventive actions are considered.