Tiieir Relation to Higher Educational Finance 
69 
Endorsements 
Notwithstanding that it has just been pointed out that the Student 
has only himself to offer, there are many institutions which require differ 
ent forms of endorsements. These ränge all the way from the endorse- 
ment of a guardian to bankable collateral. The study made by the Student 
Loan Information Bureau revealed the following information on this 
Security No. Institutions 
Note, one endorser 52 
Personal note only 51 
No security 24 
Note—no endorsement except if minor 8 
Life insurance 5 
Unclassified security 5 
Note, two endorsers 4 
Note, collateral and endorsement 3 
Note, guardian and parent guarantee 2 
Bond with three signatures 1 
Endorsement of two faculty members 1 
Life insurance or real estate 1 
Bankable note 1 
It is difficult to understand why matters should be as they are and 
what value is to be derived from requiring such endorsements and collateral. 
Where bankable collateral is required, the institution is really rendering 
the Student very little Service unless it is by way of charging him 
a lower rate of interest than at the bank. If the endorsement is that of 
a property holder, it has value as security and in helping the institution 
to form a judgment of the borrower. The endorsement by faculty mem 
bers is not widely used. This is encouraging since such a practice is 
undoubtedly unwise. The guardian or parent guarantee is of questionable 
worth even where the borrower is a minor. It shifts the responsibility 
from the Student at a time when he should be acquiring independence. 
There is nothing of soundness in all the other forms of guarantee with 
the exception of an endorsed note and but little good can be said of this. 
Since the institutions seldom press the endorser in case of default, the 
requirement of such an endorsement is superficial and burdensome. No 
reason can rightfully be assigned for such a guarantee since it is a 
foregone conclusion that it will not be made use of. 
On the other hand, it is harmful in that it denotes a lack of confidence 
in the Student and insincerity on the part of the institution. To put it 
more direct, the institution is simply bluffing the Student. It is just as 
dishonest on the part of the institution to fail to carry out parts of the 
agreement which it requires as it is for the Student to fail to pay when he 
is able to do so. This phase of Student loans has been most lacking in 
principles. This form of guarantee is the most widely used of any and, 
as presently administered, is perhaps the most increditable one.