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APPENDIX  A

EXPERIENCE  OF  THE  HARMON  FOUNDATION
IN  STUDENT  LOANS
Düring  the  three  and  one-half  years  of  Operation  in  Student  loans,
the  Harmon  Foundation  has  passed  from  the  uncertain  shoals  and  depths
of  a  rocky  sea-coast  of  theory,  hope  and  conviction,  to  the  clearly  defined
harbor  of  certainty  as  to  the  practicahility  of  making  business  loans  to
College  students  with  character  as  the  basis  of  security.
Within  this  period  nearly  one  thousand  loans  averaging  about  $170
have  been  made  to  men  and  women  in  forty-one  affiliated  Colleges.  Of
this  number  payments  on  approximately  three  hundred  fifty  have  become
due,  which  have  been  or  are  being  liquidated  in  accordance  with  the
arrangements  provided  for  installment  payments  of  $10  a  month.  The
trend  so  far  has  shown  conclusively  that  it  is  the  plan  of  easy  installments
that  appeals  to  the  average  Student  borrower.  While  a  few  have  anticipated
  payments  and  made  early  settlement,  thus  cutting  down  the  interest,
the  very  large  majority  pay  the  required  amount  month  by  month.
Repayment,  of  course,  is  the  gauge  by  which  the  plan  is  being,
and  will  continue  to  be  tested.  Now,  well  into  the  second  year  of  repayments
  the  litmus  paper  remains  essentially  blue.  The  reliability  of  Student
character  in  connection  with  financial  obligations  is  fundamentally  sound.
Experience  has  shown  that  the  great  need  at  present  is  systematic  training
  in  promptness,  and  a  healthy  respect  for  due  dates.  Far  too  many
of  the  borrowers  have  an  idea  that  paying  an  installment  at  the  end  of  the
month  is  as  satisfactory  as  having  it  in  on  the  first  when  it  is  due.  The
Division  of  Student  Loans  considers,  therefore,  that  a  very  important
part  of  its  work  is  the  requirement  of  strict  adherence  to  all  details  of  the
loan  agreement  as  preparation  for  later  contact  with  business  organizations
  that  are  operating  for  financial  return  rather  than  education  and
public  Service.
The  Division  of  Student  Loans  was  not  started  in  a  Superlative
expectation  that  return  on  all  loans  would  be  one  hundred  per  cent.
perfect  both  from  the  point  of  view  of  money  and  time.  Although  for
the  sake  of  the  individual  borrower  it  was  hoped  that  no  one  would  fail
to  follow  the  conditions  of  his  agreement,  those  who  have  slipped  from
grace,  even  temporarily,  have  unwittingly  furnished  the  working  material
for  the  experimental  laboratory  in  which  to  test  and  demonstrate  the
strength  of  the  collection  procedure.