Baylor Students Raised Voice Against Payday Loans

Students of the private Baptist Baylor University that is located in Waco, Texas protested against the enormous debt burden. They have created the colorful image on the pavement, depicting the debt abyss that becomes an unpreventable trap for the borrowers and took selfies on its background.

They wanted to communicate the metaphor about the conditions of the credit users after they take out payday loans for their educational or house rental needs. That’s why they signed a petition, claiming for strict payday lending market regulations, focusing the community attention on the cash-strapped students’ needs.

The Debt Situation in the College

According to College Factual, the financial situation in Baylor University is not worse than the national average. The study shows that:

It means that first-year students take out payday loans and other borrowings. After 2-4 years of education, this amount multiplies due to high interest rates, and the students feel financially trapped.

Meanwhile, only 3,2% of 2,972 Baylor University students that took out short-time credits in 2013 were not able to repay the debt in three years. The default rate is calculated only if the debt was not paid back in 270 days. That’s why the researchers consider that the University and the college authorities work hard to meet the students’ financial needs and the overall situation is not so bad, actually.

The Texas Payday Loan Issues

The study conducted by the Pew Research Center (and Charitable Trust) together with the private George Washington University showed that 28% of the teenagers and young people that are called millennials turn to pawnshops, short-term and payday loans.

The problem is that the interest rates are extremely high, amounting to 300 or even 400 percent per year. The students that take out these loans for educational purposes just before the first year of study, being able to repay them only after the graduation, come to the terrible “Pit of Despair”.

A Delaware legal case testifies that a fast loan company that accommodated its customer with a $200 loan, later demanded a $1,820 repayment. In several months or years, the outstanding short-time credits’ amounts multiply substantially, and the borrowers are unable to pay even their basic expenses that is for housing and education.

Finally, the students’ appeal for preventing the debt traps worked out, and in February title and payday loan services were restricted in Texas. A local ordinance concerning 33 cities, including Waco, was passed. The abusive lenders’ activities are now forbidden within the state.

Additionally, the students demand a federal regulation to be issued, protecting them against any abuses. Meanwhile, fair payday lenders exist. These loans taken out in case of emergency and repaid within 30 days are bailout for low-income workers. But, be careful, don’t delay the repayments and plan out your family budget thoughtfully.

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