A revolutionary loan program which would allow students up to 60 years to pay for their college education was proposed yesterday by Seymour E. Harris '20, Lucius N. Littauer Professor of Political Economy.
In a paper submitted to the College Entrance Examination Board, Harris proposed that private financial institutions or the federal government provide the capital for low-interest loans which could be repaid in 20, 40 or even 60 years.
Harris compared his program to a house mortgage, with the mortgage on the future earning power of the graduate. Thus, Harris continued, the financial burden would fall on the student, not the parent.
The success of long-term loans at low rates in use today indicates that such a plan would work, asserted Harris. "M.I.T. has a terrific loan plan, with only one per cent default in 25 years," he pointed out. The Business School's program, which depends "on moral obligation," is another instance of such a plan's effectiveness, Harris said. The system, he maintained, should prove to be "the most effective way of getting tuition."
"Harvard is already moving in the directions of more loans. The movement is spreading all over," said Harris. However, he admitted that full acceptance of his plan "would take some time."
"This plan requires a public relations job," Harris stated. "People are afraid to borrow." Harris cited the lifetime earnings of $500,000 that the average college graduate can expect. "The costs exclusive of tax deductions for a 20 to 40-year loan would be less than one per cent of lifetime income," he emphasized.
First of all, concluded Harris, we must conquer the American belief that borrowing for an automobile, a home, or a trip abroad is moral while loans for education, the most productive loans of all, are not.