In addition to providing food and clothing to low-income families living in the Belton and Academy school districts, Helping Hands has a charitable ministry that helps clients in emergencies pay for utilities, rent and drugs. These clients are required to take a family finance course and another elective course.

The Payday Lender Category is a project of Helping Hands Executive Director Rucker Preston, Lauren Serafy and Janae Griffiths. All three are studying for their Masters in Social Work at Baylor University.

“We are by no means experts on the subject, but we are learning and exploring the effects of payday lenders,” Preston said.

According to a report by Pew Charitable Trusts, payday loans typically offer about two weeks of credit, due in full on the borrower’s next payday, at annual interest rates of around 400%. While borrowers quickly find money to pay rent and other bills, they often remain in debt for months, struggling to pay off a loan that was touted as a short-term solution.

According to the Pew study, it takes a typical payday loan customer 5 and a half months to pay off the loan. Ultimately, the fees paid can amount to more than the original loan.

After watching a short video, the Helping Hands class members participated in a simulation and Maxine James, a mother of two, was the first.

Kim Preston served as the banker and Serafy and Griffiths were the lenders. Make a choice

Simulation participants received a fixed salary from Preston at the start of each round. Each ride also came with bills for necessities – $ 50 for food, $ 100 for the car, and $ 200 for rent – which exceeded the salary by $ 250.

Participants had a choice: take out a payday loan or forgo food, transportation or accommodation, represented by a tin can, a small car and keys.

“The object of the game is to get through all three rounds with all three necessities, but also to have no payday loan debt,” Griffiths said.

The fee for the payday loan simulation was $ 25 for a $ 100 loan, $ 50 for $ 200, and $ 100 for $ 300.

During the first round, James took out a payday loan of $ 100 and a fee of $ 25 was charged, which was not enough to cover his expenses. So she returned to payday lender Griffiths for an additional $ 100 which cost her an additional $ 25.

James made it through the first round with everything she needed but owed the lender $ 200.

In the second round, James took out a $ 100 loan from Serafy, the second lender.

In the third round, James decided to pay Lender 1 $ 50 to roll over the loan and $ 25 to Lender 2 to do the same. She also gave up food and her car.

“I guess I’m going to have to take a walk to get to work,” James said.

By the end of the three rounds, James had paid the loan companies $ 200 in fees and still owed $ 300 for the loans.

“She could potentially lose her job because she doesn’t have transportation,” said Rucker Preston.

Throughout the role play, James said she worried about how she was going to feed her family and how she was going to get to work.

“It was stressful; there was the constant worry about how you are going to survive, ”said James. “How are you going to pay them back (the lenders)? “

Like many, James was unaware that payday loans had to be paid off all at once.

“That’s the catch,” she said.

Preston and others are looking for ways to better serve people with poor credit who need short-term loans.

Texas has no limits on fees or loan size, but there has been a recent statewide push to protect consumers from predatory payday lending and auto title lending practices. A legislative effort to tighten restrictions on lenders has failed, but since then College Station, Bryan, Austin, Houston, Dallas and San Antonio have passed city ordinances to limit lending. Some cities limit the number of payday lenders in their communities.

In Waco, a group of churches are looking for ways to provide small loans to people who would normally go to payday or car title lenders.

“There would be no or very low interest rate for the first two weeks,” Griffiths said. “There is no pilot program yet, there are only discussions.”

It is Preston’s dream to have such a program in the Bell County area.