Wonga criticised over student loan suggestion

Fri, 13 Jan 2012

Wonga has been criticised over its suggestion that its high-interest offers could act as a viable alternative to the official student loans backed by the government.

The group's website described its deals as a new way of borrowing, while also suggesting the agreements - which claim annual interest rates of 4,214 per cent - could be used to fund luxuries such as holidays .

A number of organisations, such as consumer bodies, charities and student groups, condemned the company for recommending university goers opt for such high-interest loans to be used as part of their daily budgeting.

Wonga has since removed the messages from its site and claimed the article was a number of years old.

Wes Streeting, chief executive of the Helena Kennedy Foundation - which was set up in 1998 - accused the firm of exploiting undergraduates, observing: "While universities are cutting back on financial support for students it is clear that legal loan sharks like Wonga are moving in for the kill."

He added scholars should only consider deals from such lenders as a last resort when locating other types of funding proves difficult.
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