Their Relation to Higher Educational Finance 
103 
in which the loan is made. The period of turnover in education is neither 
one nor ten years, but is in fact five years and loans to students must be 
made on this basis to be successful. The Student must not be given terms 
with which it may be concluded in advance, he will not be able to comply. 
Five years from the date of the loan is the best period. What he 
borrows in his freshman year he will not be able to pay before one year 
after graduation. On the other hand, if he is planning for a successful 
career he must manage to pay his freshman loans within two years after 
graduation. The obligations which he incurs during his sophomore year 
likewise can and should be paid at the end of three years after graduation. 
So, too, loans made in the junior year can be paid four years after grad 
uation and those contracted for in the senior year paid five years after 
graduation. If the Student is planning a College course of more than 
four years, the term of the loan should be adjusted accordingly. Some 
will need six year loans, some seven year loans, and perhaps a few will 
require loans for a longer period. In all cases the term of the loan is not 
to depend on the institution, but on the number of years that the Student 
will remain in College and how soon he will begin to “cash in” on his 
training after leaving College. This will depend on what profession or field 
of endeavor he enters. 
By far the largest number of loans are long term loans, but it is also 
necessary that institutions be prepared to help the students over emergency 
periods of a few weeks or months. A short term loan can be handled in 
the same manner as a commercial loan, its duration being no longer than is 
necessary for the Student to obtain funds to cancel the note. In no case 
should it extend over one semester. If the money is needed for a longer 
period than this, it would be well to consider it a long term loan and 
handle it as such. 
Methods of Repayment 
The policy of institutions on the question of repayments has been 
varied. Much laxity is to be found in this respect and especially is 
there a lack of definiteness as to how and when the loans are to be paid. 
Three reasons may be assigned for this: first, sheer neglect of entering 
into a definite agreement; second, entering into agreements which will be 
impossible for the Student to carry out; and third, not understanding how 
collections can best be made, or not making such knowledge efifective. 
Of one hundred and five institutions answering an inquiry sent out 
by the Student Loan Information Bureau in regard to methods of making 
repayments, sixteen institutions reported that payment was required in 
full when the loan became due, sixty reported the installment method of