Their Relation to Higher Educational Finance 
97 
are overdue will eventually be paid in large measure. Sotne institutions 
have been successful in collecting money after it has been out for as long 
a period as twenty years. The relative proportions between the columns 
tabulated above are interesting. The total amount of money overdue in 
135 institutions in 1923 was $386,816, which is approximately one-fourth 
of $1,634,795, the total amount outstanding. To be exact, 23 per cent. 
of the total amount of funds was overdue. This is not surprising when 
we consider that most institutions have no systematic method of collect 
ing due and overdue accounts. The total amount outstanding ($1,634,795) 
is almost double the amount available in one year (1923). In other 
words, a sum equal to 57 per cent. of the total amount of funds out 
standing was available for the purpose of loans in 1923, which is an 
exceedingly high proportion. It means a very favorable turnover in 
loans. One-fifth ($944,905) or 20 per cent. of the total amount of funds 
originally established ($4,609,088) for the purpose of making loans to 
students was available in 1923, which would indicate a turnover approxi 
mately every five years. Taking into consideration that some institutions 
have been administering their loans very poorly, it means that other 
institutions must have been most efficient in order to bring the average 
up to this favorable level. 
Selecting The Risk 
Since the selection of the risk is important in the successful admin- 
istration of loans, it is well that this element of Student loans be fully 
elaborated here even at the risk of repetition. The supposition is that 
Student loans will be administered under the same principles as commer- 
cial loans with but a slight change in these principles in order that they 
may be applied to the student’s peculiar problem. 
No mechanical device can be put forward and no set of rules can be 
established to guide those who are to decide which students are to be 
granted loans. The proper selection of the risk is something that can 
come only as the result of experience in dealing with students. The 
student’s present needs, future ability, and willingness to pay are the 
deciding factors. His present needs can be determined by the analysis 
of his Statement as to his present financial circumstances. His present 
income consists of what he is able to receive from home without depriving 
other members of his family of a just share of the family income. If 
his family is in comfortable circumstances, there is no reason why the 
Institution should help him financially. If his family is not able or 
is unwilling to assist him, he is then eligible for a loan, provided that his 
probable future financial success warrants it. Here lies the difficulty. 
His future financial success is hard to estimate, but if a Student has a