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CHAPTER  VI

THE  ADMINISTRATION  OF  STUDENT  LOANS
The  survey  of  Student  loans  made  by  the  Student  Loan  Information
Bureau  during  the  past  year  and  by  the  Harmon  Foundation  during  the
previous  year  shows  that  there  is  no  uniformity  in  the  administration
of  Student  loans  in  the  various  Colleges  and  universities.  In  formulating
policies  for  the  administration  of  loans,  it  has  not  been  possible  to  be
guided  by  prevailing  methods,  for  each  institution  seems  to  have  a  procedure
  peculiarly  its  own.  No  two  institutions  are  guided  by  the  same
set  of  principles.  There  exists  no  distinguishable  trend  of  thought,  no
well  worked-out  policy  making  for  a  definite  purpose  or  end.  The
administration  of  loans  to  students  has  never  been  given,  nor  is  it  given
even  today,  the  proper  attention  and  place  in  the  financial  policies  of
higher  education.
In  the  working  out  of  a  policy  for  the  administration  of  Student
loans,  it  is  desirable  therefore  to  lift  all  that  is  best  from  the  various
methods  in  use  and  with  this  material  construct  a  workable  plan  which
will  approach,  as  near  as  possible,  the  ideal.  There  is  no  “yard  stick”
with  which  to  measure  that  which  is  best  in  the  various  plans.  The  selection
  of  the  best  elements  from  the  different  Systems  in  use  must  be  made
judiciously  rather  than  scientifically  and  supplemented,  where  necessary,
with  theoretical  conclusions.
Methods  of  Administration
Loan  funds  are  administered  in  two  ways:  the  restricted  method,
loaning  the  income  from  the  fund  only;  and  the  revolving  method,  loaning
  both  income  and  principal.  Taking  the  institutions  as  a  whole,  there
are  many  more  funds  administered  under  the  restricted  method  than
there  are  under  the  revolving  method.  These  conditions  do  prevail  notwithstanding
  the  fact  that  of  the  93  institutions  which  answered  an
inquiry  sent  out  by  the  Student  Loan  Information  Bureau,  69  replied
that  they  favored  the  revolving  fund.  The  replies  are  personal  opinions
of  the  iijdividuals  who  are  familiär  with  and  in  most  cases  responsible
for  the  administration  of  loans.  The  replies  revealed  opinions  as  follows:
69—favored  revolving  fund.
5—preferred  restricted  fund.
1—no  experience  with  revolving  fund.
1—doubtful.
16—no  answer.