Their Relation to Higher Educational Finance 
73 
the Student Loan Information Bureau reveals that the annual shortage 
of money for Student loans is approximately one million dollars. If we 
figure on a ten-year cycle for revolving loans, it means that at least ten 
millions of dollars more could be effectively used in this field. This means 
lending on the conservative basis that is the practice today. If a more 
liberal policy is to be extended, which is believed by many to be desirable, 
this amount could easily be tripled, creating a need of something like 
$30,000,000 more during the next ten years in the United States. This 
is in addition to funds already available. The maximum average amount 
which a Student can borrow today is about $300 during his entire College 
career. One institution is contemplating “seeing the Student through” by 
lending him $500 annually for four years, after a careful selection of 
the rislc. This would mean $2,000 loaned to each Student. Such a sum 
is not excessive, compared to what many students borrow today, if all 
his loans from different sources were added together. If this 
figure is used as a basis, the above figure ($30,000,000) then rises to 
$190,000,000 which could be used in the next ten years for Student loans 
in addition to funds already available. This would permit the raising of 
fees and thus increase the income of institutions. It would also make 
money available from outside sources for loans and enable institutions 
to use for other purposes the funds they now set aside for loans, fellow- 
ships, and scholarships. In turn, the budget deficits of Colleges and 
universities could at least be met in part by funds thus released. 
Where such a fabulous sum (even $30,000,000) can be obtained is proble- 
matical. At least it is possible to say that present funds are far from 
adequate and the reason, no doubt, is because past funds have been so 
poorly administered that confidence in Student risk has been destroyed. 
The result has been that individuals are reluctant to leave money for this 
purpose. Students, therefore, have borrowed from home where the money 
very often was needed for other useful purposes, or from friends and rela 
tives, many times bringing about an embarrassing Situation. Nor have 
such funds been obtained gratis, for many students pay commercial rates 
of interest on the money so obtained and not infrequently an even higher 
rate. Any College can raise money for a use of demonstrated soundness 
that will stand the test of economic value. 
Although some may object to the group guarantee scheme, it has many 
commendable features and will make funds available to help students 
finance themselves without any financial or social embarrassments. The 
surplus amount charged for the guarantee is the one feature against which 
objections have been lodged. If this could be done away with, the scheme 
would be self-defensible. But even this feature has a worthy element if 
viewed from a broad aspect. It is the phase of the scheme which brings