A third of university students are relying on payday loans

Research has found that a third of students are funding their university education by use of credit cards and payday loans.

A Future Finance survey of more than 1000 full-time students discovered that 31 per cent are relying on payday loans and credit cards to survive at university.

Worryingly, the survey also found that around 25 per cent of students did not think of these kinds of loans and credit cards to be a type of debt, and that 70 per cent of those surveyed did not believe their government funding was adequate to cover the costs of university life.

This lack of understanding with regards to finances is further evident by the fact that despite 63 per cent of students believing their financial knowledge is good, 40 per cent do not know what the acronym “APR” stands for.

Future Finance specialises in student loans, and the company’s CEO Brian Norton said: “It is worrying that significant numbers of students rely on credit cards, payday loans and overdrafts without even seeing them as debt. For many students, going to uni is the first time they’re required to stand on their own feet financially. It’s a big change in their life and it can be a steep learning curve.”