Their  Relation  to  Higher  Educational  Finance

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ment  on  credit.  Higher  education  is  as  truly  an  investment  for  the  individual ­
  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  individuals
  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  individual. ­
  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  institution. ­
  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.