Their Relation to Higher Educational Finance 
65 
ment on credit. Higher education is as truly an investment for the indi 
vidual and as beneficial to the public as the buying of a farm; taking 
part in a cooperative apartment plan; or the securing of any other form 
of property on the installment plan. The difference lies in the analysis of 
the basis of credit, and the method of payment and term of credit. 
Analysis of Student Credit 
A better method for analyzing this form of credit is much to be 
desired. The first requisite for better analysis is to take the matter out of 
the hands of faculty members and place it under the direct supervision 
of the business officers of the university. This Statement is warranted 
by past experiences. Where members of the faculty are in authority on 
Student loan committees, the matter has been handled less efficiently than 
when the business officers are entirely entrusted with it. Lending money 
to students is a business proposition which should be done according to 
modified business Standards. The coupling of loans with the academic 
side of education has proven unwise. Loans have been made to indi- 
viduals without due caution and without specific terms. Business officers 
in most instances in the past have been nothing short of rubber stamps in 
this matter. This may be assigned as one of the chief reasons for the 
unfortunate experiences in the field of Student loans. There is every 
reason to believe, and experience bears out the fact, that where loans are 
under the direct supervision of the business officers, they are better 
administered. The second step in this analysis is to estimate the indi 
vidual. This consists of two parts: present character and the promise 
of future ability to “cash in” on his educational investment. Credit can be 
wisely extended only to the Student who can show some evidence of 
reliability and determination of purpose. His past record, not academic, 
but his dealings in other matters is the fairer basis upon which to estimate 
his reliability. His academic record is what keeps him in or puts him out 
of the institution. The dass work is no accurate measure of his business 
principles. Let the Student have two separate and distinct relationships 
with the institution: his academic relationship, which will be cared for by 
the faculty, and his business relationship, which will be cared for by 
the business officers. 81 His academic standing is of importance, but this 
information can be made available to the business officers by the faculty 
and at that point the authority of the faculty should cease so far as the 
loan is concerned. 
81 This is in line with the view held by a small minority of the men interested in the 
Administration of higher education. This view is that the business side and the academic side of 
Institution should be kept separate and distinct. This form of Organization consists of a 
Division headed by a vice-president who administers the business side of the institution; and a 
second division also headed by a vice-president who administers the academic side of the institu 
tion. The two vice-presidents are then each fully responsible to the President for their respective 
or Sanizations. The University of California is at present conducted under a similar plan.