Their Relation to Higher Educational Finance
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Image Engineering Scan Reference Chart TE263 Serial Na
"*us year shows that there is no uniformity in the administration of
i t loans in the various Colleges and universities.
: l working out a policy for the administration of Student loans, it is
; Die to incorporate all that is best from the various methods in use.
*i I
Oethods of Administration
sv oan funds are administered under two methods. The restricted
i: d, which is loaning only the income from the fund, and the revolving
j: i, which is loaning both income and principal. There are many more
administered under the restricted method than there are under the
v ing method, notwithstanding the fact that of the 93 institutions
answered an inquiry sent out by the Student Loan Information
v x, 69 replied that they favored the revolving fund.
*; he actual conditions reported show:
1: ARACTER AND AMOUNT OF FUNDS AVAILABLE 1924-1925
Revolving $187,253 10 funds
Restricted 704,000 12 “
Emergency 5,000 2 “
Not specified 3,205,786 288 “
: a large part, the “not specified” funds ($3,205,786), is “restricted”,
j : s safe to suppose, the proportion of available funds actually to be
v ed as “restricted” is overwhelming. Much of this money was left
V restricted form and must continue to be thus administered. How-
;; t is safe to assume that there are many of these funds that could be
£ ; on a revolving basis. The revolving fund has the more weighty
l: ents in its favor besides having the favorable sentiment of a large
£: jty of officials.
_he greater efficiency of the revolving fund is indisputable. For
le, a fund of $100,000 at 5% yields $5,000 annually and would be
ä i: {nt to make a loan of $250 to 20 students. Over a period of fifteen
; it would be able to make 300 such loans. On the other hand,
äi 00 if turned into a revolving fund, allowing $20,000 of the principal
i: oaned annually for the first five years, and revolved for an additional
2[_ars, would be sufficient to make 1,475 such loans which means that
ld serve practically five times as many students.
i: ome officials and donors fear that if the principal as well as the
ä :i; is loaned, the fund will eventually disappear. This fear is well
' : ;d only if it is admitted that funds cannot be efficiently administered.
i: who administer Student loans can well afford to borrow some of the
Tjles from the business world that make loaning in small sums suc-
j. 1 Colleges and universities that have tried these principles of busi-
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