100
A Study of Student Loans and
101
Interest Rate
The Variation between the rates of interest charged on loans is as
great as the difference in the amounts of money loaned to one Student. At
present the Situation is as follows:
RATE OF INTEREST CHARGED
Rate Number of Institutions
Total 254
8% 2
7% 7
6% 118
5% 36
4% 43
3% 9
2% 13
No interest 26
Thirteen institutions have a progressive rate as follows:
3% Ist term and 6% thereafter 1
No interest unless not paid when due 1
6% and 8% if not paid annually 1
2% Service Charge and 5% after graduation 1
4% from date of note and 5% after graduation 1
4% and 5% while in College and 6% after graduation 1
4% first four years after graduation and 6% thereafter... 2
2% to 4% after graduation and 6% on overdue installments
1
No interest until three years after graduation and 4%
thereafter 1
6% or 4% if note is paid before maturity 1
5% before graduation, 6% after graduation, and 8% after
maturity 1
5% first year after graduation and 10% after maturity.... 1
It is evident that there is no similarity of practice in regard to interest
charges among the various institutions. The time at which interest Starts
can be taken into consideration along with the rate charged. The 254
institutions reporting sum up as follows:
Interest from date of loan 193
Interest from date of leaving school 35
No interest 26
Total 254
What deductions can be made from present practices? There is no
uniformity as to rate of interest nor as to time of starting interest charges.
There seems to be no reason for exempting students from paying interest
on loans granted. The Student takes out a loan because he thinks it is a
good business venture to borrow so that he may have more time to
devote to his intellectual pursuits. Not paying interest or paying anything
