UCAS will stop sending emails advertising private student loan provider Future Finance, the student charity said today, following a backlash over its marketing of high-cost loans.
The association, in charge of university applications and a trusted source of information for students, said it would “put its business with private loan companies on hiatus” and form a group to advise on future announcements.
It comes after it took fierce criticism to market the private loan provider, which charges a representative 15.9% APR and structures repayments in a way that could allow someone who borrows £ 5,000 of repay £ 13,700.
Hang up: UCAS to suspend advertising of private loan providers
After This is Money asked UCAS at the end of January why it is still marketing the ads, the association said it had made a number of changes to the ads since they last appeared in emails to students in August 2019.
The latest announcements, sent out last month, included a warning telling students to check their eligibility for government funding before considering other funding options and that the charity did not approve the announcements.
He told us in a statement that he made the differences between Student Loans Company financing and private loans “more explicit,” pointed out the APRs of private providers, looked at which groups may consider private loans, and targeted his emails accordingly, and advised all students to use government funding first.
However, that was not enough to avoid him being criticized.
The student money website, Save the Student, posted screenshots of the UCAS email advertisements on the Twitter social media platform and said: “The addition of a” disclaimer “Encouraging students to look elsewhere for money does not make this acceptable.
“UCAS is viewed as a trusted organization by UK students and should not abuse its position by partnering or working with a commercial loan company.”
The student money website, Save the Student, reported last week that UCAS is still sending emails advertising Future Finance, despite criticism of the practice last year.
He seems to have taken the critics into account. UCAS said in a statement posted on its website today: “UCAS takes its responsibility to provide neutral and reliable information very seriously.
“A key role we play for students is to provide them with information and advice on financial support and choices, such as opening their first student bank account.
“It is clear that funding options continue to evolve and the cost of living in college is a key consideration for students. It is our responsibility to help students understand and navigate all of their choices.
“As this is a developing market, we listen to feedback from students and valuable colleagues in education and finance to ensure that we provide students with the appropriate choices, including those who are commercially available.
“Based on these comments, we have decided to suspend our activity with private credit companies, and no further activity is currently planned.”
Someone who borrowed £ 5,000 according to the representative example of Future Finance would repay almost £ 13,700 over 108 months
He added, “With our new UCAS Media Advisory Group, which we are currently recruiting for, we will continue to examine this maturing market and further develop a set of principles to incorporate into our advertising framework.
“As a registered charity, UCAS relies almost half of its income on UCAS Media campaigns, which helps keep application fees low. “
Future Finance said in a statement: “We continue to provide vital funding to undergraduate and postgraduate students across the UK.
“We are a responsible lender and remain committed to ensuring that students make the right decisions based on their circumstances.
“There is a clear and growing funding gap in UK higher education.
“As government loans continue to be the first port of call, most students face a significant deficit, which means private providers like us remain an important part of the landscape.
“No one should be denied the opportunity to pursue higher education just because they can’t afford it.
“We are filling the void where students do not have family support, the opportunity to work, or access to traditional forms of funding.
“We also seek to prevent students from turning to unwanted short-term alternatives, such as payday lenders, or other more dangerous activities, such as gambling.
“Since our inception in 2014, we have loaned over £ 135million to 20,000 students, across the majority of UK universities.
“We are a company regulated by the Financial Conduct Authority and we are fully committed to adopting responsible lending practices. “
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