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

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapther VI. The administration of student loans

Collection:: Economics Books

104 A Study of Student Loans and repayment, and twenty-nine reported that it was optional with the Student as to which method he wished to adopt. The same may be said of the method of repayment as has been said of the term of the loan. There is no reason for different institutions to adopt opposite methods of repayment. That workable method which is best for one institution is usually best for the others. Students of all Colleges, as a group, go through similar experiences after leaving College and the method of repayment which is the most convenient and effective for the students of one institution is equally practical for the students of other institutions. A Student who must borrow to go through College will not, for several years, be in a position to pay off a note of a few hundred dollars all at once. When an institution requires payment in full at a specified time, it is requiring the impossible unless the note falls due four or five years after graduation. Even then it is a bad policy from the standpoint of the institution because although the student cannot pay the entire amount before several years have elapsed, he would be able to pay small periodical installments. This would keep his interest in the loan alive, would render repayment easier for the student, and would make some of the funds available to be reloaned sooner. The installment method of repayment is by far the best and it need not entail as much accounting as might be supposed. There are, how- ever, several kinds of installment payments, some of which can be adjusted to meet the student’s peculiar needs. The amortized form is no doubt the best. It is peculiarly adopted to the student’s economic progress. After leaving College, the student will be able to work off increasingly larger payments as he becomes better established and his income increases. The interest on the loan can thus be included in each payment and will not fall due in a large amount at an inopportune time. Since the student will be able to make increasingly larger payments, it is right that he be required to do so in order that the money be released sooner to be reloaned to new students. It may be said in passing that graduates who are able to turn their College loans into commercial loans should be encouraged to do so in order to make the money available sooner for more loans. It would not be difficult to carry out such a policy if graduated students were ap- proached in the right manner, individually or through the alumni. The size of the payments should be very small at first and gradually rise each successive month. Monthly installments are perhaps the best. It is a good plan to arrange that payments fall due only during the ten academic months. There are two reasons for this: first, the student is better able to pay during these months since he must provide for vaca-

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