Ucas criticised for promoting ‘inappropriate’ private loans to students

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University admissions service Ucas has been accused of promoting “inappropriate”, high-interest private loans to students.

An email sent by Ucas Media included an advert for Future Finance, which offers student loans with interest rates of between 8% and 23.7% – higher than those of government-funded loans.

Consumer campaigner Martin Lewis said Ucas had “breached an ethical line”.

Ucas said it always advised government loans as the best option for students.

The Labour Party’s deputy leader Tom Watson tweeted that it was “indefensible” for Ucas to promote “sky-high loans”, adding it should “drop these adverts straight away”.

Olga Dolchenko, CEO of Future Finance, said it was a “highly valued source of funding” for students who needed extra financial assistance and it always advised customers to seek a government-funded loan first.

Ucas is an independent charity that operates the application process for UK universities.

The advert for Future Finance was sent on 22 August by Ucas Media – the organisation’s commercial arm – to subscribers who had opted in to receiving marketing emails.

‘Young and impressionable’

Martin Lewis, who founded MoneySavingExpert.com, has written to Ucas, the universities minister and Universities UK calling for Ucas to stop sending emails with adverts for commercial loans, arguing it had “failed in its duty of care” to existing and prospective students.

He said the loans were “inappropriate for the huge majority of recipients”, with higher interest rates than government-funded loans, which are provided by the Student Loans Company, a non-profit, government-owned organisation.

“Ucas has privileged, monopoly access to this young and impressionable audience,” he wrote in his letter.

“It is also seen as an institutional authority and therefore adverts contained in your email are effectively being legitimised by inclusion, and some may even mistake it for a direct recommendation.”

He said the loans offered by Future Finance were “an entirely different beast” to government-funded loans, which currently have a maximum interest rate of 5.4%, are only repaid once graduates earn a certain amount and are wiped after 30 years.

Students must start paying off Future Finance loans while they are still at university.

A spokesperson for Universities UK said government-backed student loans were “the best available option” as, unlike a conventional debt, the amount repaid depends on how much the graduate is earning, and outstanding repayments do not impact on future lenders’ decisions.

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In a statement, Ucas said students had to actively opt-in to receive marketing material from outside companies and it “carefully considers which companies to work with”.

It added that Ucas was compliant with all relevant Charity Commission guidance.

Ms Dolchenko said Future Finance offered “fully transparent and flexible loans” and “never encourages students to borrow more than they can afford”.

“Our terms are competitive when compared with other forms of private finance, but also need to reflect the risk we take on by lending to young people with little or no credit history,” she added.


Eva Crossan Jory, vice president for welfare at the National Union of Students, said increasing numbers of students were resorting to using “high-cost lenders” as government-funded student maintenance loans often failed to cover living costs.

A Department for Education spokesperson said government-funded loans were available to eligible students regardless of their financial background, and no commercial loans offered the same level of borrower protection.

“We have increased cash-in-hand living costs support for undergraduate students from the lowest income households by 2.8% for the current academic year – 2019/20 – and have announced a further 2.9% increase for 2020/21 – to record levels,” the spokesperson added.


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