A  Study  of  Student  Loans  and

4.  No  Student  may  become  a  borrower  o£  the  fund  whose  means  of  education  are.  not  dependent
either  in  part  or  whoily  upon  his  own  efforts.  Preference  will  be  given  to  the  marginal  Student:
(a)  The  one  whose  course  will  be  interrupted  or  terminated  i£  he  cannot  obtain  a.  loan«.
(b)  The  one'who  will  not  make  the  loan  a  complete  substitute  for  outside  work.
(c)  The  one  whose  health  or  College  grades  are  likely  to  suffer  if  further  assistance-  is  not
obtained.  Scholarship  of  the  highestrank  will  not  be  a  definite  requirement  for  acceptance.
  The  Harmon  Foundation  does  not  wish  to  lend  to  inferior  students  but  is  not
opposed  to  making  loans  to  those  whose  grades  are  fair  or  low  due  to  the  heavy  bürden
of  seif  support.

LOANS
I—  Agreement
Each  borrower  is  required  to  sign  a  contract  in  which  is  set  forth  the  terms  of  his  loan.
II—  Amount
The  maximum  loan  to  any  Student  in  a  given  school  year  is  Two  Hundred  and  Fifty  Dollars
($250).  All  loans  granted  to  any  borrower  may  not  exceed  a  total  of  Five  Hundred  Dollars
($500).  The  loan  to  a  Student  may  be  sent  to  him  in  one  check,  or,  if  he  desires,  in  two  installments.

III—  Interest
Interest  at  the  rate  of  six  per  cent.  (6%)  per  annum  is  charged  from  the  date  the  check  is  issued.
IV—  Group  Guarantee
1.  Each  agreement  provides  for  the  payment  of  a  guarantee  fund  of  ten  per  cent.  (10%)  of  the
amount  of  rncne}'  borrowed.  In  no  case  shall  any  of  this  ten  per  cent.  (10%)  be  used  to  augment
  the  funds  of  the  Foundation,  or  to  cover  administrative  expense.  It  may  be  used  only  to
make  up  defaults  in  the  repayment  of  loans  within  the  group  to  which  the  borrower  belongs.
2.  Four-fifths  of  the  guarantee  fund  may  be  used  to  make  up  defaults  in  the  borrower’s  own
College  unit  for  the  year  in  which  he  borrowed.  The  remaining  one-fifth  may  be  used  to  make
up  defaults  which  occur  among  the  entire  group  of  borrowers  in  a  given  year,  in  excess  of  the
liability  of  the  individual  College  unit.
3.  After  the  loans  of  any  given  College  group  have  been  repaid  together  with  interest  and
guarantee  fund,  or  charged  off  as  defaulted,  all  of  the  four-fifths  of  the  guarantee  fund  remaining ­
  after  deducting  losses,  will  be  retumed  to  the  members  of  this  group  pro  rata  with  interest
at  six  per  cent.  (6%)  for  the  time  the  guarantee  fund  has  been  held  by  the  Foundation.
4.  After  all  loans  made  in  any  one  year  have  been  repaid  together  with  interest  and  guarantee
fund,  or  charged  off  as  defaulted,  any  guarantee  fund  remaining  will  be  distributed  among  the
borrowers  in  that  year  pro  rata  with  interest  at  six  per  cent.  (6%)  for  the  time  it  has  been  held
by  the  Foundation.
5.  In  order  to  provide  for  a  better  functioning  of  the  group  guarantee  plan  the  Foundation
requires  that  a  school  must  have  at  least  five  eligible  borrowers  in  order  to  be  granted  a  loan
fund.
TERMS  OF  REPAYMENT
-Accumulated  Interest
Borrowers  are  required  to  Start  payment  of  accumulated  interest  at  the  rate  of  Five  Dollars
($5)  a  month  beginning  December  first  after  graduation  and  continue  until  all  interest  which  has
accrued  up  to  the  following  June  first  has  been  paid.  If  all  of  such  interest  is  not  paid  by  the
Five  Dollar  ($5)  monthly  payments  at  the  time  the  Ten  Dollar  ($10)  installments  as  described
below  begin,  then  the  Ten  Dollar  ($10)  installments  shall  be  applied  against  interest  until  all
of  the  interest  accrued  to  the  above  June  first  has  been  paid.
Note:  (<j)  In  the  case  of  students  graduating  in  February,  payment  of  accumulated  interest  at  the  rate  of
Five  Dollars  ($5)  a  month  shall  begin  June  1  following  graduation  and  shall  continue  until  all
accumulated  interest  up  to  December  1  following  graduation  has  been  paid.  Installments  of
Ten  Dollars  ($10)  a  month  shall  Start  March  1,  one  year  after  graduation.  If  by  this  date  all
accumulated  interest  up  to  December  1  preceding  has  not  been  paid,  such  Ten  Dollar  ($10)
installments  will  be  applied  against  the  above  stated  interest  until  it  has  been  fully  paid.
(6)  In  the  case  of  graduate  students  commencing  repayment  three  years  from  date  of  loan  at  the
rate  of  Ten  Dollars  ($10)  a  month,  such  payments  will  apply  against  accumulated  interest
until  all  such  interest  has  been  fully  paid.