The new National Defense Student Loan Program provides American colleges and universities with a "remarkable opportunity" to increase their financial aid resources, Dean Monro said recently in the winter issue of the College Board Review. Before the new plan is fully effective, however, college communities must solve two formidable problems, Monro pointed out.

Under the Program, established by the National Defense Education Act of 1958, colleges will be able to institute substantial student loan funds with liberal repayment terms and low interest rates. Authorized appropriations for the loans began this year with $47.5 million and will reach a high of $90 million in 1962.

Monro praised the plan, explaining that it should increase flexibility in student aid programs and develop loan credit as an accepted element of college finances.

First, though, Monro continued, the idea that "students just do not want loans" must be dispelled. He cited figures indicating that "it is within the power of any college to develop an active student interest in loans." As to the question of whether it is "moral" to encourage students to borrow in order to pay their college bills, Monro noted that people seem to have little reservation about taking on other large debts.

In the second place, colleges and universities will have to learn to evaluate the needs of prospective borrowers. Lack of experience in this area, Monro maintained, should not make such measurement difficult; any good system needs only a firm, reasonable expense budget, and an equally well-determined estimate of family aid and student self-help.