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College of Human Ecology

K-State undergraduate student from Topeka researches how perceptions of finances determine who takes out payday, title loans

Wednesday, May 28, 2008

MANHATTAN -- Need some spending money for Christmas gifts? How about quick cash to pay for groceries? Just take out a loan on the title to your car or get a cash advance on your next paycheck.

TV commercials and radio jingles make it sound so easy, but that doesn't mean it's a sound financial decision. A Kansas State University undergraduate student is doing research to better understand why people would take such a financial risk.

Tiffany Harris, a sophomore in life sciences from Topeka, is working with Farrell Webb, associate professor of family studies and human services, to find out why people accept the financial risks of a title loan or payday loan. Harris is doing her research through K-State's Developing Scholars Program, which pairs underrepresented students with faculty mentors to work on research projects.

"We're mostly looking at the relationship of people's perception of their ability to meet their needs to what types of financial risks they're willing to take," Harris said.

To conduct the research, Harris is surveying people in Manhattan, Junction City and Ogden. Those who use services like payday advances and title loans are being asked how stable they think that their finances are. Harris said she is still collecting data but sees some trends emerging.

"We think that a lot of people borrow from payday lenders because they don't feel like they have any other choice," Harris said. "They don't feel that their finances are adequate. A lot of them are people who don't use banks because banks ask a lot of questions, like about credit history.

"Of the people who did use payday and title loans, a lot of them didn't know what the interest rate was. A lot of them ended up paying even more back because they couldn't make their payments on time."

Harris, who plans to study nursing, worked on a previous research project at K-State through the Developing Scholars Program that examined the distance to trauma centers in rural areas. Although her current project isn't related to health care, Harris said that gaining a better understanding of why people use title loans and payday advances will help her as a nurse.

"It's interesting to learn more about the people I may be helping someday," she said.

The project also has given her a chance to work to do in-depth research as an undergraduate student. Harris said going through the research process has helped her learn more about computer programs that help researchers process data.

Harris earned the Second Year James R. Coffman Award of Excellence from K-State. She is a member of the National Society of Collegiate Scholars, Phi Eta Sigma National Honor Society and the Multicultural Student Honor Society. She participated in a summer medical and dental education program in Louisville, Ky., and was a university experience peer instructor.

A 2006 graduate of Shawnee Heights High School, Harris is the daughter of Anthony and Cathy Harris, Topeka.

Source: Tiffany Harris, tiff06@k-state.edu
Photo available. Contact media@k-state.edu at 785-532-6415.
Video available: http://www.k-state.edu/media/audio/podcasts/devscholars.mov
News release prepared by: Erinn Barcomb-Peterson, 785-532-6415, ebarcomb@k-state.edu

This article was posted on Wednesday, May 28, 2008, and is filed under College News, Family Studies & Human Services.