Students and Small-dollar Credit

By Lynda S. Livingston.

Published by The International Journal of Interdisciplinary Educational Studies

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Article: Print $US10.00
Article: Electronic $US5.00

We present a student survey based on a recent Treasury convening on uses and abuses of small-dollar fringe credit. Financially inexperienced students may be particularly vulnerable to negative outcomes from this type of credit. Using a sample from a small liberal arts university, we find that our students are highly unlikely to use fringe products like payday loans. The news is not all good, however. While our students are very familiar with mainstream credit and savings products, they are almost entirely ignorant of their costs. Should less advantaged students display this sort of blasé attitude when transacting in the small-dollar markets, they could easily fall into a fringe-loan “debt trap.”

Keywords: Payday Loans, Fringe Lending, Small Dollar Credit, Student Finance

The International Journal of Interdisciplinary Educational Studies, Volume 7, Issue 2, pp.69-86. Article: Print (Spiral Bound). Article: Electronic (PDF File; 1.850MB).

Dr. Lynda S. Livingston

Professor of Finance, School of Business and Leadership, University of Puget Sound, Tacoma, USA

Lynda Livingston is a Nat S. and Marian W. Rogers professor of finance at the University of Puget Sound. She teaches financial markets, investments, corporate finance, and personal finance. Most of her recent work has focused on evaluating peer-to-peer markets as alternatives to payday lending. In her future work, she will concentrate on examining the capital budgeting issues surrounding coal-fired electricity generation. She is a founder of Four Horsemen Investments.