STUDENT LOANS AND 
“THE BUSINESS OF HIGHER EDUCATION” 1 
A Perspective 
It is impossible to take the correct view of Student loans unless the 
Position which they should occupy in the business of higher education is 
first considered. The institution of higher learning is made up of seven 
elements: 1. Buildings and Grounds, 2. Physical Equipment, 3. Available 
Funds, 4. The Business Administrative Staff (which go to make up the 
business division of higher education), 5. The Faculty, 6. The Academic 
Administrative Staff (which make up the academic division of higher 
education), and the Student who then enters in as the seventh element and 
who must have a relationship with each of the two divisions of the uni- 
versity. These relationships should be separate and distinct; that is, the 
student’s business relationship to the university should be with the business 
officers and under their control; his academic relationship to the university 
should be and is under the control of the faculty. 
In discussing loans we are concerned only with the student’s relation 
ship to the business side of higher education and enter into the academic 
side only to the point where his academic life will influence the business 
officers in the granting of loans. The business officer should be informed 
as to whether the Student is a member in good Standing of the academic 
community and as to whether a loan is desirable for him from an 
academic standpoint. The business officer then has this information at 
his command when he is deliberating over making a loan and this infor 
mation should act as a guide to him in the application of business princi- 
ples to loans made to students. 
The business of higher education must be clearly set forth at this 
point if it is to be shown how Student loans can be advantageously handled 
on business principles. In higher education as in industry and com 
merce, the plants have become so numerous, have reached such magni- 
tudes, and the purpose for which higher education exists has so changed 
that the academic life cannot be efficiently conducted unless the factors 
or elements of higher education are properly proportioned and the man 
agement of the physical plant and the finance is left to men trained in 
business. This management of the physical plant will mean furnishing 
it, equipping it, operating it, and financing the whole enterprise of higher 
education in such a way that the faculty will be able to do the best work. 
The faculty having decided what the requirements are for the proper 
1 The phrase “The Business of Higher Education” was suggested by the title of a course 
given in the School of Business, Columbia University, by Dr. H. Parker Willis, entitled “The 
Business of Journalism.” 
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