The University of East London (UEL) has become the first campus in the UK to take the step of banning payday lenders from advertising their services in any of its commercial properties or intellectual services in a move to protect its 28,000 students.
This ban extends to student forums online, in magazines and on posters anywhere on campus, which the university hopes will be enough to discourage its students from taking out loans with huge rates of interest as a means of tackling tuition fees and debt.
Two thousand of the students currently enrolled at the UEL, which has campus buildings in London’s Docklands and also in Stratford, fall into the bracket of student-parents – the group identified to be most at risk of falling prey to payday lenders according to the National Union of Students (NUS).
NUS vice president Peter Mercer welcomed the news, saying; “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 situations 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.”
Of course, students at UEL can hardly be insulated completely from advertisements for “quick money”, as many will commute to university via the underground system – a place usually targeted by payday lenders to attract low income workers. Furthermore, television and sites accessed outside the boundaries of the university will also attempt to appeal to students, a group which is typically shorter on cash than the majority of UK consumers.
Yet this ties in to the other aspect of UEL’s campaign, which encourages students struggling with debt to visit their student’s union building. There, the debt advice team can give them advice on money management and even arrange financial assistance for those struggling to remain afloat.
The ban comes hot on the heels of an Office for Fair Trading (OFT) decision to investigate the payday loans industry – the results of which should be released in early March. While the precise nature of the investigation is unclear at present, experts predict that the OFT will address complaints from within the industry regarding the use of APR as the standard method for comparing interest rates. As this measures the interest built up over a year, payday loan firms believe this is unfair, given that the majority of their loans last a month at most.
However, UEL will not budge on the issue regardless of the outcome, meaning that while Wonga may be allowed to advertise within Newcastle United’s home ground in the North, it will certainly not have access to the UEL’s premises.
Do you think banning payday lenders from advertising in commercial properties will help solve the problem, or would more widespread limitations have to be put in place to discourage students altogether?
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