Their  Relation  to  Higher  Educational  Einance

93

It  is  true  that  some  funds  in  the  past  have  greatly  diminished  or  disappeared
  entirely  when  the  principal  was  loaned  out.  This  was  due,  almost
always,  to  the  method  of  administration  and  not  to  the  dishonesty  of
students.  Students,  as  all  individuals,  are  honest  if  they  are  made  to  be.
The  trouble  has  arisen  because  of  the  lack  of  a  definite  agreement  with
the  Student  when  he  first  secures  a  loan,—the  “pay  when  you  can”  attitude,
and  lack  of  a  collection  System.  Those  who  administer  Student  loans
can  well  afford  to  borrow  some  of  the  principles  from  the  business  world
that  make  lending  in  small  sums  successful.  The  managers  of  credit
departments  in  concerns  in  New  York  City  which  make  small  loans  and
others  who  seil  on  the  installment  plan  are  of  the  opinion  that  99%  of
the  people  are  honest.  When  they  do  not  pay  on  time,  it  is  either  because
of  circumstances  over  which  they  have  no  control  or  a  fault  in  the  credit
department  itself.  The  fault  in  the  credit  department  may  be  a  slip-up
in  the  selection  of  the  risk,  or  a  failure  to  handle  the  customer  tactfully.
In  both  the  selection  of  the  risk  and  the  collection  of  the  money,  cases
are  to  be  handled  individually  and  each  in  accordance  with  its  own
peculiarities.  Colleges  and  universities  that  have  tried  these  elementary
principles  of  business  lending  have  been  remarkably  successful  in
administering  Student  loans.  Even  where  the  selection  of  the  risk  was
not  made  with  any  great  degree  of  care,  but  where  the  collection  of  the
loans  was  undertaken  systematically  the  results  have  been  most  satisfactory.
  That  it  is  possible  to  administer  a  loan  fund  not  only  without
loss,  but  in  such  a  way  that  the  fund  will  increase  of  itself,  is  evidenced
by  the  following  figures  which  represent  an  actual  fund  that  has  grown
of  its  own  momentum.

Date  Principal
1905  $6,927.76
1906  6,899.76
1907  7,059.56
1908  7,714.96
1909  8,319.32
1910  8,455.37
1911  8,692.37
1912  9,048.37
1913  9,702.73
1914  11,622.83
1915  12,612.58
1916  13,414.91
1917  14,587.12
1918  15,478.97
1919  16,255.10
1920  17,185.57
1921  18,480.57
1922  19,049.21
1923  20,010.84
1924  20,885.88
1925  22,038.91