Paralysis by analysis? Effects of information on student loan take-up

Can relevant information influence student borrowing? In a field experiment with a large community college, we send emails about federal student loans to students who have received financial aid offers but have not made a borrowing decision. A treatment reminding students that they need not borrow t...

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Bibliographic Details
Published inEconomics of education review Vol. 77; p. 102010
Main Authors Marx, Benjamin M., Turner, Lesley J.
Format Journal Article
LanguageEnglish
Published Elsevier Ltd 01.08.2020
Subjects
I22
D12
D91
D14
H31
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Summary:Can relevant information influence student borrowing? In a field experiment with a large community college, we send emails about federal student loans to students who have received financial aid offers but have not made a borrowing decision. A treatment reminding students that they need not borrow the maximum amount of available loan aid has no effect. Treatments referencing amounts borrowed by recent graduates shift students from borrowing the maximum amount to not borrowing. Consistent with the hypothesis that students experience cognitive overload when presented with multiple loan amounts, the response is largest among low-performing students and arises from inaction.
ISSN:0272-7757
1873-7382
DOI:10.1016/j.econedurev.2020.102010