Words by James Flynn
With their flashy adverts and adverts declaring “cash in minutes”, payday lenders can offer hope to people in financial difficulties. However, the punitive interest rates offered can quickly make the problem much worse. With payday lenders becoming visible on campus, some sending staff around to encourage students to take out high interest, high risk, payday loans, Manchester Labour Students have been working with community organising group Movement For Change and MMUnion to ensure students know the dangers of payday lending, and the alternative sources of financial support offered by MMUnion and the University. These are the aims of the Campus Credit Campaign.
There is often a focus on tuition fees when student-led campaigns are discussed. While rising tuition fees is of course an important issue, it hides the fact that the real and immediate problem for many students is not high fees, but rather the cost of day to day living. Like everyone in Britain, students are feeling the effects of rent and food prices rising much faster than inflation, and much faster than student loans. With students in an almost unique position – getting student loans in three installments a year – budgeting can be awkward, especially for first year students. Many find the money does not go as far as it first appears. This makes them vulnerable to payday lenders who, to the most desperate, can appear to be a legitimate source of financial support.
We recognise that payday lenders are legitimate businesses which operate within UK law. While this is the case, we disagree with their business model, which targets the most financially vulnerable at their most desperate. This includes students. With this in mind, an increasing concern is that many payday lenders have actively targeted students, with some companies set up specifically for the student market. If a student with financial issues sees an advert for a payday lender, saying a thousand pounds can be in their account within an hour, it is a tempting proposition. However, the incredibly high interest rates offered on this type of loan, some as high as 5,853%, can quickly make the problem worse. That payday lenders focus on how quickly the money can be in your account, and not the scale of repayment, and that this message is normalised through the use of puppets and cartoon characters, exacerbates this issue by making this form of lending appear harmless, or even fun.
These issues have lead Manchester Labour Students to work with MMUnion to deliver our Campus Credit Campaign. MMUnion have been very supportive and we are thankful to outgoing MMUnion President, Hannah Templeman, for her unwavering support over the past year. Our Campus Credit Roadshow has been on various locations on campus his past week, where people passionate about this issue have been talking to fellow students. We are pleased that so many students see this as a major concern – some had alarming stories of the situations their friends had found themselves in, having taken a payday loan as a form of financial support. We were also able to promote the alternative means of support offered by the MMUnion Advice Centre and the University Student Financial Support Department, who offer Emergency Hardship Loans and the Access To Learning Fund for students who do fall into financial difficulties. We would advise students to go down these avenues of support, and never consider a payday loan. We were also delighted to be joined briefly on the stall by Ed Miliband and Shadow Business Secretary Chuka Umunna, who were at MMU on Friday for a Small Business and Enterprise event.
Often those involved in student politics are dismissed as amateurish, and their campaigns as ineffective and not leading to genuine change. This is a misconception. Manchester Labour Students have been able to obtain a guarantee from MMUnion and the University as a whole that payday lenders will not be tolerated on campus, and that their own financial advice and support is better promoted to students. This would not have been possible without the actions of a committed group from our society, and of course the support of MMUnion. I would urge students with a cause that they are passionate about to get active and involve themselves in campaigning on campus, as they can make a real difference.
James Flynn is a third-year Politics student and MMU Chair of Manchester Labour Students, the biggest Labour Students group in the country. He tweets @james_flynn