A study of student loans and their relation to higher educational finance

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Monograph

Identifikator:: 1028402236

URN:: urn:nbn:de:zbw-retromon-41825

Document type:: Monograph

Author:: Chassee, Leo Jeannot

Title:: A study of student loans and their relation to higher educational finance

Place of publication:: New York

Publisher:: Harmon Foundation, Inc.

Year of publication:: 1925

Scope:: 1 Online-Ressource (170 Seiten)

Digitisation:: 2018

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapther VI. The administration of student loans

Collection:: Economics Books

Their Relation to Higher Educational Finance 101 loan without interest he is in fact accepting a gift of $6, in addition to getting a loan without collateral. Six dollars is not a very large sum to add to his indebtedness and still it would change the color and put backbone into the whole transaction. If the interest charged is lower than the commercial rate, the Student is given the difference between what he pays and the commercial rate unless it can be shown that he is a better risk than the average commercial risk. To Charge less than the commercial rate of interest therefore, is the same as to make a gift of the difference and brings in the same objections which can be lodged against making outright gifts. No able-bodied, self-respecting Student wants to receive that kind of help. The experience of the Loan Asso ciation of the German Student Body, which has recently come into existence in Germany, has shown that students as a rule prefer to borrow any necessary money rather than to receive it as charity. This sentiment is growing among American students and there are groups of students in some of the American institutions that prefer loans at a commercial rate rather than anything less than that rate. The more enterprising Student almost invariably prefers a loan on a business basis to one made otherwise and also prefers such a loan to a fellowship or scholarship. If such a sentiment is not already ingrained in the Student, the university has a duty to perform in helping him to develop it, for when he encounters the outside world, this quality is one which will help him to succeed. The same reasons hold true in regard to the time at which the interest should Start. There is no reason why the interest should not Start from the time the loan is made. So far as the rate of interest and the time at which it begins are concerned, Student loans should be handled in exactly the same manner as commercial loans. Security for Student Loans The different forms of security required for Student loans has been discussed in Chapter V and is referred to here for the sake of emphasis and completeness. As already stated, the only security which the Student has is himself and the only measure of his ability to pay is an estimate of his future financial success. To arrive at a decision as to whether a student should be granted a loan or not is a difficult task and one which can be efficiently performed only after much experience in judging people and especially in judging young people. Requiring collateral or endorsements is not good because the Student should be placed on his own responsibility; an honor note is much to be preferred to a collateral or endorsed note. In order to insure the loan fund against heavy losses due to poor loans, some form of group guarantee should be brought into use. This will not only decrease the losses, but will give a means of

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