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

Usage license:: Get license information via the feedback formular.

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter IV. The student as a financial risk

Collection:: Economics Books

Their Relation to Higher Educational Finance 67 mean the accommodation of a larger number of students with loans if the funds are efficiently administered. The value of properly administered loans in establishing a credit rating for the Student is not to be overestimated. If he is made to meet his öbligations on time and in accordance with his agreement, he not only creates for himself a credit rating, but comes to realize the importance of such a credit Standing in his dealings with others. There are few College people who are able to do this without a certain amount of moral pressure. This is where loans to students are bound to differ somewhat from busi- ness loans. The Student is not a business man as yet and therefore must be assisted to grow up to sound business principles rather than have these principles applied to him directly during his College career. This does not mean more laxity than in business, but a sympathetic sort of firmness. The third element of value which loans have in the training of the Student, namely, assisting him in making a good investment, carries with it an economic benefit which far surpasses the value of the loan. The institution is helping him to invest in a product that will constantly increase in value and which will net him not only cash returns, but other returns as well. It assists him to make the best use of his time and trains him to exchange present pleasures for greater future pleasures. In the administration of Student loans, therefore, the institution has an opportunity to render the Student a four-fold Service: selling him a valuable product on easy terms, making him realize the full value of his purchase, assisting him to purchase this product in an honorable way, and giving him a training in business methods. Student Security The administration of Student loans differs from commercial loans in still another respect. The Student does not have a fixed line of credit, but has possibilities which are difficult to evaluate. He can get endorse- ments, but not always bankable endorsements; he has no collateral, and his character is not yet definitely formed. Though these are the funda- mentals of credit, still the very foundation of credit is faith in another and this is the very element upon which the Student can claim credit and upon which credit must be extended to him. This is the one security which he has to offer—a promise to make good and not to break the trust placed in him. The one security, then, which the Student has to offer is himself. 32 In granting credit to a large Corporation, character plays a minor part, the finances of the Corporation must be separated from individualities. 32 . . credit precedes and exists independently of the instrument; contracts, written or Pärol (oral), characterize a credit economy and may well be regarded as an essential attribute of p e djt, but emphasis on this feature is likely to becloud the more fundamental element—confidence." K. B. Westerfield, Banking Principles and Practice, Vol. 1, p. 36.

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