A recent report shows that thousands of students are utilising payday lenders in order to cover financial issues. Unite Students undertook a survey of approximately 8,500 students from across the UK and found that an increasing amount are facing financial problems. It also revealed that a staggering 26,400 undergraduates and 5,400 postgraduates are utilising payday lenders, with many paying annual interest rates of up to 1,500%.
Jenny Shaw, head of student services for Unite Students believes that unfortunately payday lenders have become a go-to alternative. The report showed that more than 600,000 students have found themselves struggling to afford daily living costs and as Shaw states, "it's worrying to see a greater proportion of applicants believe payday lenders are the way forward." Shaw advices students to "do anything you can to avoid it."
Several students receive an average maintenance payment of £4,000 per year. However, The National Union of Students have filed complaints arguing that the amount is simply not enough to cover all daily living costs. Megan Dunn, the NUS president, has said: "With maintenance loans failing to cover the spiraling cost of student living, we are concerned many young people may feel they have no option but to risk exploitation by legal loan sharks."