For the past three years, one University of Minnesota student has battled payday lending.

Adam Rao, a graduating MBA candidate at the Carlson School of Management, has worked with two different companies to help those effected by payday lending, a formof high-interest, short-term money lending.

“[It’s] a horrible, predatory practice that primarily affects people with lower and moderate incomes,” Rao said.

The total, usually an average of $500, is typically required to be repaid in two weeks, unless borrowers pay for an extension. Payday loans are often used for unexpected costs, like car and house repairs.

Chances are, Rao said, if someone doesn’t have the loan amount to begin with, it will be hard to collect in two weeks.

People can get stuck in a cycle of paying fees to keep the loans open until they can repay the total, by which time they may have paid up to four times as much, he said.

“The business model [of payday lenders] is designed to, and does, trap borrowers into long-term debt,” said Ron Elwood, supervising attorney for the Legal Services Advocacy Project.

Rao said he joined the Exodus Lending — the nation’s first nonprofit payday loan refinancing program — in 2014 to help people out of this debt spiral. He became an intern with Sunrise Banks in 2015 and plans to join the company full-time in June.

Exodus pays off clients’ outstanding loans, he said, giving them a year to pay back Exodus in monthly payments. The company also offers free financial help classes.

Exodus’s monthly payments give people breathing room payday lenders don’t, Rao said.

Since it started, Exodus has served over 100 clients and 50 have paid off their loans so far, said Sara Nelson-Pallmeyer, Exodus’ executive director.

Sunrise Banks offers an alternative to payday loans and gives clients more time. It normally deals with larger loan payments in the $1,000 to $3,000 range, Rao said.

Exodus and Sunrise provide reliable relief and alternatives to the more predatory nature of payday loans, he said.

Rao said more can be done about payday loans with both education and legislation.

Since the Minnesota Legislature legalized payday lending in 1995, several efforts have been made to regulate it.

Meghan Olsen-Biebighauser, co-founder of Exodus, said a state legislative bill that would have capped how many payday loans people can take out in a year failed in 2014.

Current efforts are focused on capping the interest rates at 36 percent, Nelson-Pallmeyer said. Fifteen other states have introduced 36 percent interest rate caps, she said. Currently, there is no cap in Minnesota.

“That’s what we would love to see here,” she said.

Rao said there should be more education for business students on the ways payday lending primarily affects lower income and minority populations.

Nonprofit and for-profit groups should work together on refinancing payday loans and other similar issues, Rao said.

Olsen-Biebighauser and Nelson-Pellmeyer said Exodus will spend most of this year educating the public on payday issues.

“One of our goals is to become the most influential voice on payday lending,” Nelson-Pellmeyer said, “so that people know that payday lenders are taking advantage of people.”