Wonga, which has a representative APR of 4,214%, describes itself on its website as a ¡°totally new way of borrowing money¡± that avoids the ¡°nasty debt¡± of state-subsidised student loans which it claims ¡°potentially encourage[s] you to live beyond your means¡±.

A Wonga loan of ?400, paid back in a month, would accrue over ?125 in fees and interest.

Wes Streeting, chief executive of the Helena Kennedy Foundation and deputy head of the Independent Taskforce on Student Finance Information, said that private lenders were ¡°going in for the kill¡± in the wake of bursaries being cut by universities in favour of fee waivers.

Advising that students look to the Student Loans Company, grants and bursaries and university support first, Mr Streeting said that taking on commercial debt should be seen as a ¡°last resort¡±.

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¡°The problem is that people will get themselves into eye-watering levels of debt and what may be intended as a short-term loan can actually end up being a trap into a cycle of debt that students can¡¯t escape from,¡± he said.

Pete Mercer, vice-president (welfare), of the National Union of Students, said it was ¡°irresponsible¡± to suggesting that short-term loans with high interest rates were part of everyday financial planning.

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¡°Wonga should immediately withdraw this predatory marketing, which contains information that appears to be inaccurate, and is aimed at financially vulnerable young people,¡± he said.

Mr Streeting said that Wonga¡¯s positioning should make universities wake up to the extent of student hardship: ¡°Universities should think very seriously about the consequences of their students having to turn to commercial lenders to afford the cost of studying,¡± he said.

¡°I want universities to start seeing these warning signs of a growing crisis in student finance and reverse the cuts they have planned. This is a crisis that can be avoided, but universities seem to be walking right into it.¡±

A spokeswoman for Wonga said: ¡°Students represent a tiny fraction of our customers and need to have a regular income, just like any customer, to be considered.

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¡°Our decisions about any students who do choose to apply are based on the same rigorous checks we perform on all applications, but we do not believe working, adult students should be excluded from a popular credit option.

¡°We do not actively target students in any way and our marketing is all mainstream, such as on the TV and radio.

¡°The two web pages in question are examples of the many search engine optimisation pages on our site, which is essentially content covering all aspects of credit, designed to help our particular option appear in general internet searches for loans or credit.

¡°As for the content of those pages, we merely highlight the risk and high cost of unauthorised overdraft charges, plus the potential trap of long-term debt versus a short-term solution.¡±

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sarah.cunnane@tsleducation.com