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.

Chapter

Document type:: Monograph

Structure type:: Chapter

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

Collection:: Economics Books

Tiieir Relation to Higher Educational Finance 69 Endorsements Notwithstanding that it has just been pointed out that the Student has only himself to offer, there are many institutions which require differ ent forms of endorsements. These ränge all the way from the endorse- ment of a guardian to bankable collateral. The study made by the Student Loan Information Bureau revealed the following information on this Security No. Institutions Note, one endorser 52 Personal note only 51 No security 24 Note—no endorsement except if minor 8 Life insurance 5 Unclassified security 5 Note, two endorsers 4 Note, collateral and endorsement 3 Note, guardian and parent guarantee 2 Bond with three signatures 1 Endorsement of two faculty members 1 Life insurance or real estate 1 Bankable note 1 It is difficult to understand why matters should be as they are and what value is to be derived from requiring such endorsements and collateral. Where bankable collateral is required, the institution is really rendering the Student very little Service unless it is by way of charging him a lower rate of interest than at the bank. If the endorsement is that of a property holder, it has value as security and in helping the institution to form a judgment of the borrower. The endorsement by faculty mem bers is not widely used. This is encouraging since such a practice is undoubtedly unwise. The guardian or parent guarantee is of questionable worth even where the borrower is a minor. It shifts the responsibility from the Student at a time when he should be acquiring independence. There is nothing of soundness in all the other forms of guarantee with the exception of an endorsed note and but little good can be said of this. Since the institutions seldom press the endorser in case of default, the requirement of such an endorsement is superficial and burdensome. No reason can rightfully be assigned for such a guarantee since it is a foregone conclusion that it will not be made use of. On the other hand, it is harmful in that it denotes a lack of confidence in the Student and insincerity on the part of the institution. To put it more direct, the institution is simply bluffing the Student. It is just as dishonest on the part of the institution to fail to carry out parts of the agreement which it requires as it is for the Student to fail to pay when he is able to do so. This phase of Student loans has been most lacking in principles. This form of guarantee is the most widely used of any and, as presently administered, is perhaps the most increditable one.

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