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 disposing
of the question is to ask: Shall generations pay as they go or consume
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.
