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A  Study  of  Student  Loans  and

There  is  a  question,  however,  as  to  whether  it  would  be  wise  for
educational  institutions  to  turn  over  loan  funds  to  financial  organizations
for  administration.  Those  who  are  in  doubt  as  to  the  wisdom  of  such
a  Step  believe:  first,  that  the  educational  institution  can  handle  the  matter
as  well  as  the  financial  institution;  second,  that  if  the  students  do  not
repay,  it  will  reflect  on  the  university  and  the  university  will  have  to  make
good  the  defaults;  third,  since  the  university  would  have  to  make  good
these  defaults  the  bank  or  trust  Company  might  not  use  its  utmost  efforts
to  press  collection;  fourth,  that  it  is  questionable  whether  some  financial
institutions  could  administer  such  funds  more  efficiently  than  educational ­
  institutions;  fifth,  that  some  officials  are  reluctant  to  relinquish  their
power  over  the  administration  of  Student  loans;  sixth,  that  many  of  the
funds  are  so  tied  up  that  provisions  must  be  made  to  administer  them  at
the  institution  and  since  this  must  be  done  machinery  may  as  well  be
developed  to  administer  all  of  the  Student  loans.
We  conclude  that:
1.  Institutions  must  make  provisions  to  administer  the  funds
intrusted  to  them  for  Student  loans.
2.  Banks  and  Trust  Companies  are  well  adapted  to  lending  money
to  students  and  due  to  the  legal  restrictions  placed  upon  them,
there  is  little  danger  that  they  will  go  to  extremes  in  this  matter.
Their  efforts  should  be  a  valuable  Supplement  to  those  made  by
the  educational  institutions.
3.  Universities  and  Colleges  must  develop  higher  Standards  and
more  efficiency  in  the  administration  of  Student  loans.
Philanthropie  and  Semi-Philanthropic  Organizations
The  administration  of  Student  loans  by  those  organizations  which  fall
under  this  dass  is  much  to  be  desired.  Organizations  such  as  the  Harmon
Foundation,  can  well  administer  funds  to  students  and  in  that  way  be
of  great  Service  to  higher  education.  The  Service  is  of  two  kinds:  first,
that  actually  rendered  in  the  making  of  loans,  which  enable  young  people
to  finance  themselves  through  College  in  an  independent  and  business-like
way;  and  second,  that  of  raising  the  Standards  in  loan  administration
since  organizations  of  this  type  are  not  hampered  by  institutional  views
as  are  Colleges  and  universities.  The  first  is  a  direct  benefit,  the  second
is  a  benefit  derived  through  wholesome  influence.  Such  foundations  are
therefore  of  Service  in  their  influence  and  work  and  their  loans  form  a
valuable  Supplement  to  loans  made  by  educational  institutions  and  other
organizations.