Their Relation to Higher Educational Einance 
93 
It is true that some funds in the past have greatly diminished or disap- 
peared entirely when the principal was loaned out. This was due, almost 
always, to the method of administration and not to the dishonesty of 
students. Students, as all individuals, are honest if they are made to be. 
The trouble has arisen because of the lack of a definite agreement with 
the Student when he first secures a loan,—the “pay when you can” attitude, 
and lack of a collection System. Those who administer Student loans 
can well afford to borrow some of the principles from the business world 
that make lending in small sums successful. The managers of credit 
departments in concerns in New York City which make small loans and 
others who seil on the installment plan are of the opinion that 99% of 
the people are honest. When they do not pay on time, it is either because 
of circumstances over which they have no control or a fault in the credit 
department itself. The fault in the credit department may be a slip-up 
in the selection of the risk, or a failure to handle the customer tactfully. 
In both the selection of the risk and the collection of the money, cases 
are to be handled individually and each in accordance with its own 
peculiarities. Colleges and universities that have tried these elementary 
principles of business lending have been remarkably successful in 
administering Student loans. Even where the selection of the risk was 
not made with any great degree of care, but where the collection of the 
loans was undertaken systematically the results have been most satis- 
factory. That it is possible to administer a loan fund not only without 
loss, but in such a way that the fund will increase of itself, is evidenced 
by the following figures which represent an actual fund that has grown 
of its own momentum. 
Date Principal 
1905 $6,927.76 
1906 6,899.76 
1907 7,059.56 
1908 7,714.96 
1909 8,319.32 
1910 8,455.37 
1911 8,692.37 
1912 9,048.37 
1913 9,702.73 
1914 11,622.83 
1915 12,612.58 
1916 13,414.91 
1917 14,587.12 
1918 15,478.97 
1919 16,255.10 
1920 17,185.57 
1921 18,480.57 
1922 19,049.21 
1923 20,010.84 
1924 20,885.88 
1925 22,038.91