The short-term loans , typically due by your next payday, can come with interest rates as high as 400%, the Consumer Financial Protection Bureau has found. For comparison, that's more than 10 times the rate on more pricey credit cards. It takes borrowers roughly five months to pay off the loans and costs them an average of $520 in charges, according to Pew Trusts.

That's the takeaway from research being released by the FINRA Investor Education Foundation in conjunction with April financial literacy month .

Requiring high school students to take a personal finance course reduces their likelihood of taking out expensive payday loans down the road.

Yet younger people may have few other borrowing options, Harvey said. "It's difficult to secure credit by mainstream means if you don't have the sufficient history."

"Consumers should use alternative financial services as a last resort," said Melody Harvey , author of the study and a fellow at the Institute for Research on Poverty at the University of Wisconsin-Madison.

There are more payday lenders in the country than McDonald's or Starbucks.

Young adults who are required to take a personal finance class in order to graduate are 4 percentage points less likely to take out payday loans than peers who weren't required to do so, Harvey found.

That's a significant drop, considering that nearly 20% of people in the U.S. ages 19 to 31 report using the short-term loans.

Harvey compared the behaviors of individuals living in a state with a personal finance education mandate to older counterparts living in the same state and the same-aged counterparts living in a state without a mandate.

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In some classrooms — including those in Tennessee and Utah — the risks of payday loans are directly addressed. At other schools across the country, teachers stick to more general topics such as interest rates and debt management. Both forms instill a wariness in students around the loans after they've left the classroom, Harvey said.

Another recent study found that in states where personal finance education is mandated, students go on to make better decisions about how to pay for college. For example, they don't take on as much private debt.

"My goal at looking at payday loans was to speak to the applicability of these courses for situations that students will encounter in the very near future," Harvey said.

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