STUDENT  LOANS  AND
“THE  BUSINESS  OF  HIGHER  EDUCATION” 1

A  Perspective
It  is  impossible  to  take  the  correct  view  of  Student  loans  unless  the
Position  which  they  should  occupy  in  the  business  of  higher  education  is
first  considered.  The  institution  of  higher  learning  is  made  up  of  seven
elements:  1.  Buildings  and  Grounds,  2.  Physical  Equipment,  3.  Available
Funds,  4.  The  Business  Administrative  Staff  (which  go  to  make  up  the
business  division  of  higher  education),  5.  The  Faculty,  6.  The  Academic
Administrative  Staff  (which  make  up  the  academic  division  of  higher
education),  and  the  Student  who  then  enters  in  as  the  seventh  element  and
who  must  have  a  relationship  with  each  of  the  two  divisions  of  the  university.
  These  relationships  should  be  separate  and  distinct;  that  is,  the
student’s  business  relationship  to  the  university  should  be  with  the  business
officers  and  under  their  control;  his  academic  relationship  to  the  university
should  be  and  is  under  the  control  of  the  faculty.
In  discussing  loans  we  are  concerned  only  with  the  student’s  relationship ­
  to  the  business  side  of  higher  education  and  enter  into  the  academic
side  only  to  the  point  where  his  academic  life  will  influence  the  business
officers  in  the  granting  of  loans.  The  business  officer  should  be  informed
as  to  whether  the  Student  is  a  member  in  good  Standing  of  the  academic
community  and  as  to  whether  a  loan  is  desirable  for  him  from  an
academic  standpoint.  The  business  officer  then  has  this  information  at
his  command  when  he  is  deliberating  over  making  a  loan  and  this  information ­
  should  act  as  a  guide  to  him  in  the  application  of  business  principles
  to  loans  made  to  students.
The  business  of  higher  education  must  be  clearly  set  forth  at  this
point  if  it  is  to  be  shown  how  Student  loans  can  be  advantageously  handled
on  business  principles.  In  higher  education  as  in  industry  and  commerce, ­
  the  plants  have  become  so  numerous,  have  reached  such  magnitudes,
  and  the  purpose  for  which  higher  education  exists  has  so  changed
that  the  academic  life  cannot  be  efficiently  conducted  unless  the  factors
or  elements  of  higher  education  are  properly  proportioned  and  the  management ­
  of  the  physical  plant  and  the  finance  is  left  to  men  trained  in
business.  This  management  of  the  physical  plant  will  mean  furnishing
it,  equipping  it,  operating  it,  and  financing  the  whole  enterprise  of  higher
education  in  such  a  way  that  the  faculty  will  be  able  to  do  the  best  work.
The  faculty  having  decided  what  the  requirements  are  for  the  proper
1  The  phrase  “The  Business  of  Higher  Education”  was  suggested  by  the  title  of  a  course
given  in  the  School  of  Business,  Columbia  University,  by  Dr.  H.  Parker  Willis,  entitled  “The
Business  of  Journalism.”

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