150 
A Study oe Student Loans 
i' 
ten years. It was to be a revolving fund, since in the ten-year period the 
loans would be repaid and thus funds made available for new loans. 
The interest on the Capital and interest payments of the borrower were 
to be used to raise the insurance fund against non-payments. A form 
of group guarantee is used by the association. Every Student in a German 
university is taxed one mark each session for the purpose of building up 
the insurance fund. 
_ This general tax as well as the activity of the Loan Association would 
fix in the minds of all well-off students that they have obligations toward 
their comrades who are in need. 5 
Early Difficulties of the Association 
The currency disaster in Germany which took the form of inflation 
hindered the plan of building up a big Capital. Later with the introduction 
of a stable currency, the financial Situation improved. The difficulty which 
first presented itself was the depreciation of the money that had been 
loaned. The continual depreciation of paper marks and the rise in prices 
made it difficult for the Student to be free from care and need. The loans 
extended were thus mostly gifts to the borrower and the Capital was practi- 
cally destroyed by inflation. Loaning on the gold mark plan was then 
adopted and many of the paper mark borrowers were asked and consented 
to pay back a larger amount, even though they had no legal Obligation to 
do so. 
Future Prospects 
The possibilities of the Organization, as set forth by its business man 
agement, are very great, provided there is a just application of the dis- 
posable funds. It is hoped by the association that the German students 
will help to realize these possibilities by their cooperation. 
The work of the association will be able to prosper only if the Spirit 
of self-government and self-help will be strengthened in the students at 
present and in the future. 6 
5 Ibid. 
• Ibid.