Wonga causes outrage by targeting students

Wonga causes outrage by targeting students

Payday loan company Wonga has removed an article from its website which suggested that students should take out a payday loan rather than a Student Loan.

The article suggested that student loans, which charge around 5 per cent, encouraged students to live beyond their means.

With Wonga charging around 4,000 per cent for its loans, the article provoked protests from education groups, MPs, students and debt charities.

The National Union of Students (NUS) said that Wonga was wrong to target its marketing on students.

Vice-president of the NUS, Pete Mercer, said: “It is highly irresponsible of any company to suggest to students that high-cost short-term loans be a part of their everyday financial planning.”

He said that students should talk to the NUS or financial advisers at their university as financial support was available for students in difficulty.

Wonga removed the article, which it said was designed to make its services easier to find on internet search engines, and published a statement saying the article had given rise to misunderstandings and was out-of-date.

Worries over money are causing fewer students to apply to university, with the number of UK-born university applicants falling by 8% according to the Universities and Colleges Admissions Service (Ucas).

An increase in university fees, which can now be as much as £9,000, is believed to have contributed to the number of UK applications falling to 283,680, compared with 306,908 at the same point last year.

However this could be partly due to a significant increase in applications in 2010, when some students brought forward their studies in anticipation of the fee increase.

Martin Lewis, the head of a government taskforce on student finance information, believes that prospective students could be deterred by the mistaken belief that they would have to pay the fees upfront on their first day of university.

University fees can be paid with a student loan which students do not have to repay until they graduate and start earning more than £21,000.

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