Econ Ed Link is a good source of comprehensive lesson plans for teaching economics lessons. How Expensive Are Payday Loans? is one of the featured lesson plans for use with ninth through twelfth grade students. The lesson is based upon a Federal Trade Commission video explanation of the costs of payday loans. The video in conjunction with the lesson plan teach students how to calculate the total cost of loan after accounting for finance charges, interest, and loan origination fees. The video is embedded below.
Applications for Education How Expensive Are Payday Loans? could be a great companion lesson to my personal finance game Life on Minimum Wage. When students reach the point in the game that they need to borrow money, stop the game and interjection the lesson on the cost of payday loans.
