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Thousand of students relying on payday loans


Tens of thousands of students are relying on high-interest payday loans to help them finance their daily living costs, according to a survey from Unite Students.

The survey found rising numbers of students reporting financial problems, as 26,400 undergraduates and 5,400 postgraduates depend on payday lenders, paying interest rates of up to 1,500%.

The fact that payday companies will lend to students has been criticised as lenders should require borrowers to have both a regular and disposable income, which most students would lack.

The number of students who believe that they don’t have enough money to pay their daily living costs has risen by 12% in the last year, which works out at more than 600,000 students. There was also a 7% increase in the number of students getting into higher levels of debt than first expected.

Many students receive less than £4,000 to cover their maintenance costs through a whole year. The National Union of Students has complained that the loans and grants available are not enough to cover even the cost of student accommodation.

NUS president Megan Dunn said:
"With maintenance loans failing to cover the spiralling cost of student living, we are concerned many young people may feel they have no option but to risk exploitation by legal loan sharks,"

Jenny Shaw, head of student services for Unite Students, said:
"It's worrying to see a greater proportion of applicants believe payday lenders are the way forward."
Payday lenders have claimed that students are “capable of making informed choices”.

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