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A Study of Student Loans
individuals stood ready to make good the losses. There is no question but
that such a venture on the part of financial institutions is sound. Trust
Companies should be well adapted to handle Student loans.
There is a question, however, as to whether it would be wise for
educational institutions to turn over loan funds to financial institutions
for administration. Many of the funds are so tied up that Provision must
be made to administer them at the institution and if this is done machinery
may as well be developed to administer all of the Student loans. Institu
tions, Colleges, and universities must make provision to handle the funds
intrusted to them for Student loans, and develop higher Standards and
more efficiency in their administration. Banks and trust Companies
are well adapted to loaning money to students and due to the legal restric-
tions placed upon them, there is little danger that they will go to extremes
in this matter.
24. Philanthropie and Semi-Philanthropic Organizations
The administration of Student loans by such organizations as fall
under this dass is much to be desired. Organizations such as the Harmon
Foundation can well administer funds to students and in that way be of
great service to higher education. Also, since they are not hampered by
institutional views as are Colleges and universities, they can raise the
Standard in loan administration and thus lead the way to more business-
like methods of administering all Student loan funds.
Colleges and universities must handle at least some of the Student
loans. They need to work out new policies and develop a System for the
administration of Student loans. Such policies and System can be built
by borrowing the effective elements: in Systems now in use; from the field
of commercial and investment banking; in such plans as the Harmon
Plan and some used in Europe; and by making use of the principles herein
set forth which are the results of an inquiry conducted by the Student
Loan Information Bureau.