"Three billion dollars," predicts Professor Seymour Harris, "will have to come from increased tuition rates in the next decade, if universities are to survive." How Harvard and the rest can meet this demand, with inflation shrinking endowment assets at the same time that alumni contributions diminish, is a problem Harris has attempted to solve in his plan for a long term student loan program.

Harris' plan is simply this: each student who needs aid would borrow $1,000, one half of which would go towards his current needs, the other five hundred towards tuition. The financiers would be either private business, such as insurance companies, or hopefully the federal government. If this program were taken up and handled properly, Harris says that "private institutions of higher learning could increase their tuition by $400 to $600 in five years." Such a program also would make doubling of current teacher salaries possible by 1970.

Apparent Enormity

Actually what Harris suggests is a counterpart of a house mortgage loan. In this case, the 'mortgage' is on the anticipated earning power of the college graduate. By his own calculations, Harris sees the lifetime income of a man graduating now as about three quarters of a million dollars. This means that the the costs of repayment would be less than one per cent of lifetime income, assuming that the student borrows for three years (that is, the four college years sans summers), and the interest rate is kept low. Payment would be spread out from twenty to forty years, with option, of course, to repay as soon as one desired. Approximate rates of interest are four per cent on a twenty year loan, and two per cent on forty years.

In such a long term proposal as this, it is necessary to have a very clear and accurate crystal ball to estimate expenses and future conditions. Harris thinks that the current amount of loans needed is about a billion and a half dollars per year, and by 1970 about two and a half billion. The apparent enormity of the loans necessary does not rule out the plan on paper, whatever actual fund-raising difficulties (the University could attest that there are many) might be. When the general picture of American private debt is considered, however, these figures do not seem so formidable. In the past decade consumer credit went up nearly three and a half billion dollars a year, and mortgage debts rose nearly eleven billion a year. Gross savings, at thirty seven billion in 1947, are predicted to jump to a hundred billion by 1970. The increase in debt incurred by the Harris plan would, in this respect, be relatively small.

What would the effects of such a program be on the recipients and on the universities themselves? The universities certainly would profit. "A rise of $500 in tutition made possible substantially by an adequate loan program," Harris says, "would double salaries and re-establish the economic status of faculty at a level commensurate with the attraction of talent." There is one local drawback, however. If private business is not interested in taking on the program (which seems likely, since inflation would probably deplete much of the profit), the alternative suggested is the federal government. These two words are anathema at University Hall, because there is a tradition of fear of federal meddling in the autonomous actions of the University.

Epic Size

Perhaps if Harvard combined its scholarship funds with the interest from its investments and had an outside company administer this fund as a loan program, the government could be avoided. But there are other problems. The bookkeeping alone for such a program, keeping track of thousands of thirty and forty year loans, would be of epic size. A great quasi-Social Securities office would have to be set up, and with an inevitable upward rise of secretary salaries and of business equipment, the plan could cost more than it's worth.

On the other and more important hand, the student may not like it. Even though he will know a loan is for the university's good and his own, there would have to be a considerable repression of human nature on the part of most students. To step out into the world after graduation with a four thousand dollar loan on one's shoulders is not a happy prospect, even if one has a life-time to pay it back. The loan, ever present, being reduced by a piddling sum each year, could turn into a hateful obligation fairly soon. Knowledge that the repayment is less than one per cent of total income will only prolong the indebtedness, not diminish it.

What Harris has done by his plan is try to make the best way out of a bad situation. So far the bad situation remains insurmountable: dwindling resources, inflation squeeze, enrollment increase, faculty pay demands. Anything is possible, but some things are certain. That Harris' plan would work, is possible; that the situation is going to get worse, is certain.