72 
A Study of Student Loans and 
members. Many students when introduced to this scheme are more in 
favor of it than the charitable plans. They experience a feeling of inde- 
pendence for their group. They like to know that they are not dependent 
upon their elders, but can battle their own way. It comes to them at a 
time when the desire for independence is greatest and such a System of 
loans is a source of real pleasure to desirable students. Those who 
have borrowed under a plan of this kind have expressed themselves in 
such a manner. The following quotation is worth-while evidence as to 
how some students view this form of security: 
Each borrower feels that he is in a measure responsible for the ongoing 
of the plan as a whole and thus holds himself accountable not only to the 
members of his group, but to students who will in the future need help such 
as he himself has received. He is no longer an individual borrower accountable 
chiefly to himself, but is rather a link in an endless chain, the continuity of 
which depends upon his own integrity. 
Thus the sense of responsibility at first centering about himself has 
through his participation in a common enterprise passed its narrow bounds 
until it is now a feeling of Obligation to countless people, most of whom he 
will never see. The Student loan is therefore a powerful instrument in devel- 
oping character because it operates indirectly, for it is a truism that when 
character is made the object of conscious, labored effort, the purpose is 
defeated by the selfish nature of the process employed. Character is truly 
the by-product of fine living and can best be developed by strengthening per 
sonal integrity and quickening that sense of social responsibility which trans- 
cends private interest. 37 
The group guarantee plan makes use of the only asset which the 
Student has—present and future character. A loan made on this basis 
is a Service to the individual and the Community, since it moulds and 
strengthens the element which is the best kind of collateral and is the 
essence of credit—the element of character. The group guarantee further 
develops a spirit of group responsibility which is fundamental in our 
present institutional society. This form of borrowing helps the Student 
to acquire financial independence because it takes him directly into 
the field of finance, making him realize the serious and definite nature 
of his contract which he frequently did not feel when borrowing under 
the old regime. On the other hand, group guarantee releases for loans 
the principal of funds rather than confining loans to the income of funds 
only. Needless to say this makes it possible to serve a much larger num- 
ber of students. At the same time the funds are just as safe as when 
invested in gilt-edged securities. 
The group guarantee plan therefore serves a purpose and fills a need. 
The funds now available for loans to students are inadequate and this 
plan should attract more money into a field which will enable students to 
borrow more and in a manner in which many prefer. An estimate made 
on the basis of figures jointly compiled by the Harmon Foundation and 
37 Taken from an essay on the group guarantee plan for Student loans written by Martin C. 
E/ntorfF, and quoted in Harmon Foundation Bulletin, June, 1925.