Their Relation to Higher Educational Finance 
71 
In reality, money loaned by the university or College on a note af honor 
is under a group guarantee. The Student who borrows thus feels that 
he owes it to the Institution and to those who are to come after him, to pay 
the money back. That which he fails to repay, other students must pay 
for him in the way of decreased equipment or less money to be loaned to 
future students. It is the “next batch” of students who pay for the 
defaults of the “present batch.” Under the group guarantee it is the 
“present batch” that pays for the defaulting member of its own group. 
The question, therefore, must not be whether the group guarantee is sound, 
but rather which form of grouping is the most sound. It is all group 
guarantee. One is positive, the other negative. The positive is to be 
preferred. Shall the next generation pay for the defaults of the present 
generation or shall the present generation pay for its own defaults? There 
should be no need for argument to convince the thoughtful individual 
which is the better plan. It is easier for a group to use pressure upon its 
own members than it is for the members of the following group (in point 
of time) to exert pressure upon their predecessors. A terse way of dis- 
posing of the question is to ask: Shall generations pay as they go or con- 
sume what rightfully belongs to posterity? This question may be thrown 
out as a challenge to the leaders of higher education. If they are to be 
worthy of their trust as leaders, they must Start from the roots of the 
evil. They must conserve and use more skillfully the instruments of 
higher education. 36 The first step towards such Conservation is to 
encourage the present generation to pay full price for what it consumes. 
The influence of such a program practiced by higher education would go 
far beyond the walls of the institution. It would ingrain in the College 
Student a quality which is now lacking, namely, the sense of placing a 
higher price on the training which he receives and the willingness to pay 
that price. The influence would then project itself into future time so that 
when the Student thus trained becomes a leader in the community, he will 
exert an influence towards the ideal which is fundamental to civilization—- 
that the generation of present time must leave more to posterity than it 
has received from ancestry. 
Service of the Group Guarantee 
The group guarantee therefore serves as an instrument to teach the 
“pay as you go” doctrine—speaking in terms of generations. It is an 
instrument to make the present “batch of students” look after their own 
30 This Statement is based on the thought that higher education is produced by the use of 
seven instruments or what may be called the seven elements of higher education. Without regard 
to their order of importance they may be stated as: (1) Buildings and grounds, (2) Physical 
equipment, (3) Available funds, (4) The Student body, (5) The faculty, (6) The Academic 
Administrative Staff, (7) The Business Administration Staff. The efficiency of higher education 
depends upon the proper combination or proportioning of these elements.