# Discipline and the Derelict (collection)/The Borrower

When I used to lie awake at night and try to devise means of disposing of the money which I should make by writing a book or through my investments in oil stock, one of the philanthropic plans which suggested itself to me most frequently of getting rid of my spoils, was to found a loan fund for needy students by which boys with ambition and no financial backing should be able to borrow money easily to complete a college education. I had been desperately hard up myself as an undergraduate, and I had a more than ordinarily sympathetic feeling for others in the same situation and a desire to mitigate their pain. I know a good deal more about the college borrower, however, than I did twenty years ago, and though I still believe in college loan funds, I am not so sure as I once was that money or an education too easily obtained is always highly valued. I have found that not all of the young fellows in college who are willing to borrow money deserve to be helped, and that many who most deserve help are unwilling to borrow. I have seen the college borrower in a new light. It so happens that my official position has given me an unusual opportunity to observe two classes of men in college who want to be helped out of financial holes: those who have come to me for personal and immediate help because I seem good-natured and easy, and those who come to me as an ​official of the University, who for some years has had general charge of the University loan funds. I have gained the confidence, also, of not a few soft-hearted friends who have at one time or another yielded to the touch of the indigent undergraduate, and who have told me whether they have lived to regret their momentary and monetary weakness or to rejoice that the chance had been given them to help a needy and a worthy youth. From these two experiences I have accumulated a considerable body of experience and have formulated generalizations.
Our loan funds at the University of Illinois are safeguarded by numerous regulations and restrictions so that it is not possible for an undergraduate who finds himself out of funds in the morning to negotiate a loan from his alma mater before evening. The prospective borrower must fill out an application blank, he must give references, he must, in most cases, offer security and must submit the names of at least two persons who know him and who are acquainted with the individual whose name he offers as security for the repayment of his loan. All this takes time—sometimes it requires a month for all the preliminaries to be gone through, for few people answer letters promptly, and some otherwise good citizens never answer them at all, and so possibly save themselves considerable bother, as do those worthy though unprogressive individuals who refuse to install a telephone. The borrower who has not made his plans sufficiently far ahead of time is sometimes annoyed by what he considers unnecessary red tape and inexcusable delay. A young fellow called on me only a few weeks ago wishing to get help from one ​of our loan funds. His monthly check had not come, he had an engagement out of town, he needed thirty dollars immediately, and he wanted to catch the afternoon train. When I explained to him that our loan funds were not primarily to relieve such cases of distress as he presented, but even if we should be willing to make a loan to him it would take at least two weeks and possibly a month to get it approved, he was quite disgusted, and went out of my office muttering anathemas against the system.
The undergraduate who borrows money is usually inexperienced in financial matters. He has established nothing that resembles credit, he is ignorant of all such things as interest: and security and discount except as he may have come into contact with the terms while pursuing the study of arithmetic in the grades. He has seldom signed a promissory note before, and he usually signs this first one, unless some one insists otherwise, without reading it. He is told, perhaps, that the note bears five per cent. interest from date and that it will fall due in two years and eight months. This fact, however, is not likely to make any serious impression upon his mind excepting that it seems a sufficiently safe distance in the future to cause him no immediate uneasiness or worry. I have never known more than a half dozen student borrowers who got the date of the maturity of their note so definitely in mind as to be sure of it without a notification from the bursar. It is true that all of our regulations and requirements are down in black and white and are given to every student to be read when he applies for a loan, and though he affirms when he makes application for his loan that ​he has read these regulations, and though I have no doubt he goes over them, they seldom make any lasting impression upon him.
Most students have the feeling that it should be easier in a college town to borrow money not only from the college itself, but from private individuals, than in any other community. The contrary of this is in fact true, for men with money who live in a college town have had more experiences in lending it and more opportunities to lend it to undergraduates than have other people and have learned something from that experience. Every week almost throughout the college year some student, down in his financial luck, often a man whom I have never seen before on his first registration day, comes cheerfully and confidently into my office and asks, "Could you tell the name of some one in town who would lend me some money?"
"Can you give security?" I inquire. He seldom knows what I mean by the term, but when I explain I find almost invariably that he can not, so that the banks are out of the question. I generally explain to such a man that the place for him to get money is at home where he has friends, where people know him, and where, if he has lived a steady, dependable life, there are no doubt those who would be willing to trust him; but he generally leaves me discontented and disappointed.
I am surprised often, too, at the optimism of many of those who wish to borrow. Fellows who have not been able to save anything in the past are eager to tax the future, gonfidently expecting that what has proved impossible this year will offer no difficulties ​next. A man came into my office last fall and said that he would like very much to enter college. He, however, had no money and his entrance was dependent entirely upon his ability to borrow a sum sufficient to carry him through the year. He was not young—was in fact, I discovered by inquiry, twenty-eight years of age. He had been out of high school eight years, had had a fair position during all that time, was without responsibilities excepting to take care of himself, but he had not saved a cent; he did not have enough money to pay our matriculation and incidental fees, which are in reality trifling.
I told him that it would be impossible for the University to lend him money, because it now has a tegulation that no loans are available to students until they have been in residence for at least one year, but I went further to show him that if he had only himself to support, and had held a good position for so many years without saving a little money at least, so far as any loan was concerned he was what I should call a pretty poor bet. Any individual or institution would be doing a foolish thing if it lent him money with the idea that it would within any reasonable time be paid back.
The man who does not look ahead before he enters upon any enterprise to determine how he is going to complete what he has undertaken, as well as the undergraduate who enters upon the work of a year in college without having determined upon some way in which he may be able to meet his expenses, is ordinarily a poor risk. If he borrows money he will be quite as unlikely to make definite plans to pay it back and will come up to the time of the maturity of ​his note with hardly more than enough money to pay the interest. It is the fellow who applies early for his loan, who makes his plans a reasonable time ahead, who usually proves to be the best risk. A man who goes into debt should have in mind at least two reasonable ways for meeting his obligation, so that if one failed the other might prove dependable, just as a boy pursued by an angry bull in a pasture should be able to figure, as he flees to safety, that if he is unable to climb over the fence he may dodge under. He should take into consideration, also, the fact that it is the unexpected usually that happens. The fellow who never had an accident in his life, and who, therefore, considers it unnecessary to carry accident insurance is often the first to slip on the stairway and break a couple of ribs. The man who borrows should take into account the ordinary accidents and unexpected exigencies of life, but it is rarely that he does do so.
The granting of loans from the funds which I have to do with is usually restricted to students of good or excellent scholarship. In presenting to the University the money for establishing one of our, funds, the donor said specifically:
"I do not wish loans to be granted from this fund to-students simply because they are ambitious and needy. I feel that a great University should give special aid only to those men and women who show distinct promise of intellectual power and success." It is true, however, that many an undergraduate while having to work for his living in college seems intellectually commonplace, but if through a loan he is permitted to give all of his time to his work, ​he shows at once a marked increase in intellectual power. I have not, however, found that the scholastic standing of a student is in any dependable way an index of whether or not he will show promptness in the repayment of a loan. As often as not the dullard is as conscientious in meeting his financial obligations as is the high brow.
One significant fact has shown itself in the collecting of loans due the University. We have three principal loan funds. From one of these the loan is made to the individual student upon his own personal note without endorsement by a second person. Notes drawn upon each of the other two funds require security. No insistence has been made that these last notes be bankable, but only that a second person who has been recommended as honest and reliable sign them. Even when these notes are not paid when due there is seldom an attempt made to collect from the security. In but one instance, so far as I now remember, during the twenty years that the funds have been available has an endorser of a note been required to pay. It is a fact, nevertheless, that the notes that bear an endorsement are met with much greater promptness and regularity than are the other notes. It is not an exaggeration, I believe, to say that the unendorsed notes run twice as long, before they are finally met, as do those which bear an endorsement. The man who gives only his personal note feels safer, knows usually that a collection could with difficulty be forced, and so feels justified in taking his time.
A few years ago a wealthy friend of education offered to present to the University five-hundred dollars a year to be given to such needy students as the ​University might designate and in such sums as might be determined. This was done for one year, but the effect upon the men themselves was to my mind not a good one; they were not stimulated by it, their self-respect and self-reliance were not strengthened. I therefore wrote the trustee of the fund suggesting that the amount which he should put at our disposal be lent to students, rather than given to them, at a low rate of interest for a reasonable period of time and upon its repayment that it be used to increase the fund available. This was done, and the effect in my opinion has been much more salutary. What we get for nothing we seldom value.
The time set for the repayment of the loans, which I am discussing, is two years following the date of the borrower's regular or expected graduation. It has been interesting if disappointing to me to find that only a very small percentage of the loans are paid within that time; if they were, the University would each year have at its disposal nearly twice as much money available for loans as it now has. The time the notes actually run, I have no doubt, if the matter were investigated, is fully twice as long as that agreed upon. Most of the loans are ultimately paid, for however careless he may be and however long he may delay the liquidation of his debt, the college borrower is innately honest and at least means well.
There are exceptions to this last statement of course, one of which I recall. I met an old college acquaintance of mine a few months ago. He had been graduated twenty-five years or more, and though he had not made any marked success in his profession, yet he was in comfortable circumstances and ​without a family depending upon him. He was recalling old friends and old experiences.
"You know the President lent me two hundred and fifty dollars in my junior year," he said. "I suppose the debt's outlawed long ago."
"Haven't you paid it?" I asked him in astonishment.
"No," he replied quite nonchalantly. "He never pushed me, and so I just let it go. He's dead now, anyway."
There was no suggestion in his tone of obligation or gratitude or shame for having treated a friend badly; and the kindly old man who had done him the service had lived a life of sacrifice and died in comparative poverty, no one knowing how much of his savings had gone with the two hundred and fifty dollars which my college acquaintance referred to.
The actual reasons why the college borrower does not pay are usually the reasons of youth, for youth is optimistic, the future always looks bright; to-morrow is to be a more successful day than to-day has been. There is no coefficient of error introduced into his calculations for the future, and he seldom if ever prepares for the worst or for the unexpected.
Some men are thoughtless, careless, and indifferent. Having made an obligation, the fact passes out of their mind entirely until their attention is called to it. Under these circumstances they are quite unlikely to be in any position to meet the obligation because they have not prepared to do so.
Some, naturally, have ill-luck. Their wages when they get to work are lower than they anticipated; illness overtakes them, and a hospital bill, and a doctor's ​bill have to be paid; unforeseen calamities arise in their immediate families, for which they were not prepared, and for which they were not responsible. All these things must be taken for granted, and expected, but they do not indicate the usual nor the normal condition of affairs.
Other graduates fall into situations at once in which unusual opportunities for investment present themselves. They are thereupon loath to use their money for the payment of a debt which seems to many of them, now that the money has been spent, very much like putting their earnings into a dead horse. "I could have paid the loan a long time ago," one man frankly wrote me, "but I could get money nowhere else at so low a rate of interest, and my investments were bringing me so much more than this that I could hardly be expected to withdraw them just as I was getting a financial start to pay this debt. The University can afford to lose better than I can."
A few men take advantage of any chance to evade payment. I am reminded of one of these whom I had personally helped. He was not eligible for one of our regular loans. He was down financially, had a chance to get a good job in a distant city, but had no money to pay his transportation. I came to the rescue and took his personal note for the thirty-five dollars required to carry him to his destination. When I wrote him a year later suggesting payment of the sum borrowed, he replied that it was at that time inconvenient for him to pay; besides, he added, the debt was uncollectible since he was not of legal age when he signed the note. He was, therefore, ​he alleged, at liberty to pay when and if he pleased. There are not many like him, thank heaven.
It is a curious coincidence that of the eight men whose loans from one of our funds are longest overdue seven are lawyers. Perhaps their knowledge of the law has helped them in the evasion or the neglect of their obligations. It will at once be said by some one that the explanation of the phenomenon lies in the fact that lawyers are long in getting established, and that these men are not making enough money to meet their obligations, that they must spend what they make in order to keep up a respectable appearance. This is a good explanation, but in this case it is not the correct one. Of the ten lawyers whom I have repeatedly written concerning overdue accounts only one has replied; no one has paid, though all are quite able to pay.
A great many fail to meet their obligations on time because they plan to pay in one sum what they have borrowed. Almost every one who goes out from college could, from the very beginning spare five or ten or fifteen dollars a month from his salary and so gradually reduce his debt; but when it comes to having at hand two hundred or three hundred or five hundred dollars, the situation becomes more complicated if not impossible. There are too many temptations surrounding the man just out of college tending to separate him from his money to make it likely that he will have available at one time the total sum of his indebtedness. If he begins by making monthly payments he will be surprised how quickly the debt will be cancelled without any apparent embarrassment to himself.
​But the excuses already given explain only a small percentage of the cases where notes are not met at the time of maturity. Far and away the largest number of graduates who fail to meet their notes when they become due give matrimony as the only excuse. Whether the self-supporting student who must borrow while he is in college is after he graduates less experienced in the affairs of the heart or more sentimental than the average, it is a fact that he is the first to gather his family gods under his own roof-tree, and, ignoring or forgetting his former obligations, to take to himself a wife. It has become quite a habit with me now, when a former student does not pay his loan when it becomes due, to suppose that he has married, or knowing that he has married and that his regular monthly payments have ceased, to surmise that his family has increased in size, and my supposition is nearly always correct.
A few years ago I found in the morning mail an appealing letter from a former undergraduate. He had been out of work for some time until all his funds had gone. Now, however, he had found a good job. His only trouble was that he did not have at hand, nor could he get, sufficient money to meet the most simple living expenses until he should obtain his first month's pay. Would I not, remembering our former friendship, let him have twenty-five dollars until pay day, and thus virtually save his life? I sent him a check for the amount asked for, but did not hear from him for months. I wrote him two or three times, but even my letters brought me no response. Then one day when I was in the city I called ​him up on the telephone and inquired courteously why I had not heard from him. He seemed reluctant at first to give me any definite explanation, assured me that it had been his specific intention to write me that very day, and, finally, when pressed admitted that he married immediately following the receipt of my check and added that I, being married myself, could well understand that the necessity of buying furniture and establishing a home left him no surplus to meet obligations previously incurred. I understood perfectly. Incidentally I have not yet received my money, though I have had a postal card picture of the new baby and a brief line from father indicating that he expected soon to send me a remittance.
A few quotations from those who have assumed later matrimonial obligations will illustrate the excuses I receive for delayed payments: "My wife's hospital bill has added an extra burden during the last year," one man writes; "I am to be married in December," says another, "and do not find myself financially where I expected." "In September after my graduation," moans a third, "I was married, and my salary was reduced to a living wage. I, therefore, find it impossible," ete.
Here are a few more: "To be frank with you, I have had money enough to pay the loan at two different times, but six months ago I took the best girl in the world in wedlock." "If you ever began life on a small salary, with some indebtedness, in a city where the cost of living is high, you would appreciate," etc. "My expenditures are those of a married man with one child."
​Matrimony seems to be thought an adequate excuse for all sorts of financial delinquencies, since fully seventy-five per cent. of those students who have availed themselves of the advantages of our loan funds in the past, find it the only excuse they have to offer for not meeting their obligations on time. So often is the excuse given that I have recently had inserted in the application blank which students fill out when asking for a loan, this question, "Do you contemplate marrying soon?" In all this that I have related something seems to me wrong. Is it our system, or our teaching, or is it that the student who makes the loan has an inadequate conception of his obligation, or does marriage like war constitute an adequate and legitimate excuse for a man's not meeting his financial obligations promptly?
There is another class of borrower, however, in college whom most undergraduates who have soft hearts and easy purse strings, and whom all college officials are acquainted with. These men are those who do not wish to take advantage of the more formal methods of obtaining help through the regular loan funds established by the institution, but who are only temporarily insolvent and who are expecting checks on the next mail or legacies at the convening of the next term of court. I had a man ask me for a loan once who had an aged grandfather upon whose death he was expecting rather generous returns. I had the strength of character to refuse the request, and though that was years ago, at last reports grandfather was as hale and hearty as ever.
These men seldom want a great deal, but they want it at once to meet the pressing obligation or to catch ​the waiting car. I think I have not, more than ordinary men, found it difficult to resist their plausible arguments, but my experience with them has been varied and interesting. They are the harder to resist because their plea is so reasonable and their need so urgent. I have done business in one way or another with a good many of them within the last twenty years, and though the most of them have paid, so far as I now remember, only six have strictly kept their agreements. Until a week ago it was only five, but last week a man to whom I had lent thirty dollars, paid me three days before he had agreed to do so and surprised and almost shocked me by adding twenty-five cents for interest.
"Do you know where La Rue is now and what he is doing?" one of my faculty friends asked me the other day.
"He's married and has a good job in Peoria," I replied. "Why do you ask?"
"Well, he borrowed a hundred dollars from me just before he graduated with the understanding that it was to be paid within a few months, and I've not seen hide nor hair of him since. If he were hard up I did not want to press him, but if he is able to pay I thought I might as well have the money as he."
Few weeks go by that I am not approached by students with the request that I endorse a note for them at the bank in order that they may make a short time loan. In my younger and less experienced days I used occasionally to do this when I thought I knew my man, but after I had paid a few of these notes at times which were often annoyingly inconvenient to me, I came to the conclusion that I should under no ​circumstances endorse a note for a student or any one else for that matter. If I had the money and felt so inclined I might let him have it, and if I did do this it would be with no idea of being able to count on its return at the time he agreed to do it. If he did pay it when he agreed to, it was just like finding it; if he did not I was not surprised. I felt always in such a case as Josh Billings in his beatitude "Blessed are they who expect nothing, for they shall not be disappointed!"
An experience of this sort was mine only a few months ago. A young fellow whom I knew very slightly presented himself at my desk with a promissory note in his hand for forty dollars all filled out and ready for my signature.
"I can't do it, Mack," I said, "I'm sorry, but I've paid my share of that sort of note, and I've sworn off."
"You wouldn't have to pay this one," he assured me.
"That's what they all said," I continued, "and I have no doubt they honestly meant it." He seemed so disappointed and in so difficult a place that I was rather sorry for him. "If I should sign the note," I asked him, "how would you meet it? Where is the money coming from?"
"I have a pretty generous allowance," he explained, "and I am sure I could easily pay ten dollars a month out of it if I could get this money, and I surely do need it very seriously." I hesitated a moment and then said.
"I'll lend you the money myself and take your note for six months. That ought to give you plenty of ​time." I gave him the money, took his note, ana ne left me. I did not see him again until after the end of the six months and then only because I sent for him. When he came at my call he paid a part of his indebtedness, made no explanation of his delay, promised to pay the rest within a few days, and passed on. That is the last time I have seen him. Well, perhaps it all went in a good cause, for Mack joined the army and fought for his country. My experience with him, however, is typical and characteristic.
Some one who reads this article may say that I am over-pessimistic, that my faith in the honesty and promptness of the undergraduate is weak, and that any inference drawn from the facts and incidents presented herein would tend to discourage any one who might have a tendency to help the needy undergraduate in college. I hope that this is not true. No one can surpass me in the confidence and faith I have in the college man. I think he will meet his obligations, but I think because of his youth and inexperience that he will seldom do so within the time that he first sets for himself; and if he can not do so he will seldom make any explanation or offer any excuse. He argues that if he can not pay, it does no good just to say so.
I believe, on the whole, that those men who have given money to aid needy students more readily to finish their college course have done well—better even sometimes than do those who endow libraries, or who erect fine buildings for educational purposes, because those who aid the self-supporting student are equipping men more quickly, and directly for life. Those, too, who might otherwise be developed into ​broad-minded, cultivated students, if they have to give all their time to earning a living, are often kept narrow and inefficient by the hard, cruel grind. If I were to come to the aid of the borrower in college I should do so with my eyes open, I should face the actual facts which experience with these things had taught me, and I should surround the granting of these loans with such restrictions as would make them comparatively safe risks.
Of course if the terms upon which loans are granted by the college are so rigid as to make it next to impossible for the needy undergraduate to meet them, the whole purpose of the loan is defeated. If the student must meet the conditions which a bank imposes then, barring the fact that the college loan is usually made at a somewhat lower rate of interest than one must pay at the bank, the borrower might quite as well patronize his local bank. I should not make such loans prohibitive, but I should grant them only after a careful investigation and study of the character and need of the prospective borrower; for after all the main safeguard in making such a loan is the personal character of the individual who is receiving the loan.
I should very seldom lend money to students under the junior year. If the under classman must begin to borrow he is likely so heavily to handicap himself with debt at the very beginning of his college course that he grows discouraged, gives up the task, and never graduates. He is too young usually to realize the meaning of debt. Since such a man seldom graduates, he, therefore, does not fit himself for rapid advancement in any line of work which he may take ​up, and he finds it difficult to save enough money beyond his living expenses to meet any considerable debt. The man who does not begin to borrow before his junior or his senior year can usually see the end not far away, and he struggles on to the finish. If he does not immediately marry he stands a good chance of shortly paying up his obligation.
I believe in a young man's marrying early, but ordinarily I think he should not do so while he is in debt. It is not so cheap for two to live as one and never has been, and the young fellow who takes a wife faces the probability of doctor bills, of increasing family, and of irregular employment, and these conditions are not conducive to the payment of old debts. For this reason, just stated, I have usually hesitated to recommend a loan to any applicant when it seemed likely that he would marry before his debt was fully paid.
The loan most easily obtained is usually the one least appreciated and least likely to be repaid. I believe it is a good thing for the student who wishes to avail himself of the privileges of a college fund to be required to offer some security. Life insurance is a protection in case of the borrower's death, but any one who has lived twenty years or more should not find it impossible to secure an endorser of his note, a member of his family or a friend, who at least has the reputation for honesty even if he is not to any large exten a property holder. The fact that two names are on a note shows that there is some one who is willing to vouch for the borrower's honesty. There is a certain responsibility upon the student, also, to make good, to meet his obligation, and to justify himself ​in the eyes of the man who trusted him sufficiently to put his name to a note. I used to feel otherwise, but an experience with hundreds of borrowers has changed my viewpoint entirely.
A student should seldom borrow, during any year, more than half the amount necessary to meet his college expenses. He should have saved something from his work during the summer vacation, and if he can get no help from home, he can always find leisure time which can be profitably utilized in adding to his income and the use of which for this purpose need not interfere either with his pleasure or his studies. A small debt is often an incentive to the man just out of college to work hard and save his money, but a heavy one is likely to take most of the joy out of life, and to discourage the debtor utterly.
Whether loans should be made to students with high scholastic standing only, depends upon whether one is interested mainly in scholarship or in citizenship, and though I should think it unwise to put much money into the intellectual development of the dullard, I should never confine my beneficences to high-grade students only. The average man is for purposes of citizenship quite worth while, and quite worthy of any help which may be bestowed upon him.
I should still like some day to found a loan fund for needy students, but I should not be willing to lend to every one who asks, or even to every one who is in real need. Sometimes the eager borrower is lazy; he is not willing to work as he might to keep himself in funds. Sometimes he is inefficient and lacking in initiative, so that he has not been able to avail himself of opportunities for other sorts of help ​which were at hand. Sometimes he has not lived within his means and wishes to borrow only that he may live more extravagantly than he should. I should not want to lend to any of these, nor should I make it too easy even for the best of fellows to get a Joan.
It is a good policy for the upperclassman who is hard up, if he has a definite purpose before him and an average mind and body, to borrow money to get him over the last hard pull of the senior year. I have always been sorry that I did not myself borrow more. Had I done so I could have accomplished more during my last year. But the man who bortows should really be a man who takes his obligations seriously, who meets them promptly, who, when he gives his word, keeps it.