100 
A Study of Student Loans and 
101 
Interest Rate 
The Variation between the rates of interest charged on loans is as 
great as the difference in the amounts of money loaned to one Student. At 
present the Situation is as follows: 
RATE OF INTEREST CHARGED 
Rate Number of Institutions 
Total 254 
8% 2 
7% 7 
6% 118 
5% 36 
4% 43 
3% 9 
2% 13 
No interest 26 
Thirteen institutions have a progressive rate as follows: 
3% Ist term and 6% thereafter 1 
No interest unless not paid when due 1 
6% and 8% if not paid annually 1 
2% Service Charge and 5% after graduation 1 
4% from date of note and 5% after graduation 1 
4% and 5% while in College and 6% after graduation 1 
4% first four years after graduation and 6% thereafter... 2 
2% to 4% after graduation and 6% on overdue install- 
ments 1 
No interest until three years after graduation and 4% 
thereafter 1 
6% or 4% if note is paid before maturity 1 
5% before graduation, 6% after graduation, and 8% after 
maturity 1 
5% first year after graduation and 10% after maturity.... 1 
It is evident that there is no similarity of practice in regard to interest 
charges among the various institutions. The time at which interest Starts 
can be taken into consideration along with the rate charged. The 254 
institutions reporting sum up as follows: 
Interest from date of loan 193 
Interest from date of leaving school 35 
No interest 26 
Total 254 
What deductions can be made from present practices? There is no 
uniformity as to rate of interest nor as to time of starting interest charges. 
There seems to be no reason for exempting students from paying interest 
on loans granted. The Student takes out a loan because he thinks it is a 
good business venture to borrow so that he may have more time to 
devote to his intellectual pursuits. Not paying interest or paying anything