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

Their Relation to Higher Educational Finance 75 By grouping in this manner those administering loans could reach the defaulting borrowers through the alumni association and a rivalry could be set up between the different classes as to which would have the best record at the end of, say, ten or fifteen years. The assessment for the guarantee fund could be placed on the borrowing group in the dass, the borrowing groups in the entire institution, and the borrowers of the corresponding dass in all institutions. Thus the insurance would come from the dass group, the College group, and the intercollegiate dass group in the case of funds adminis- tered by an outside or intercollegiate Organization. If it is a College fund, the intercollegiate element should be omitted. Such a form of guarantee should be more effective than one where there exists no connection except- ing the loan connection. It may be said, then, that the group guarantee plan is sound both in principle and practice and is the most effective means to administer funds. As used at present, the only objections are the form of grouping and the allocation of charges for the guarantee fund. The groups should be large and in accordance with already existing groups—the dass, the College, and those of the corresponding dass in the different Colleges and universities. Organizing a certain number of borrowing members of a dass in this manner, they, in conjunction with the business officers of the university, could pass upon the eligibility of other members of the dass who wished to borrow. This should be a most effective manner in which to select the borrowers. The students know the members of their own dass better than the faculty or business officers. It would also eliminate the element of Unfairness which exists under the present group guarantee plan, namely, making students responsible for others when they have had no part in the selection of the risk. If all the members of the group are to be responsible for individual defaults which occur, then they should have a voice in the selection of their fellow members. Thus with a different form of grouping, the giving to the members of a group a voice in the selection of additional members and different allocation of charges for the guarantee fund, the group guarantee should be most commendable. Disposing of the Guarantee Fund After having decided that the guarantee fund is desirable as an assur- ance and as a source of pressure to force payment, it becomes necessary to provide for the handling of such a fund. The amount required should be sufficient only to cover losses and the remainder should be refunded. It should be possible, after sufficient experience, to make the surcharge for this purpose just enough to cover losses with perhaps a safe margin.

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