Student Loan Choice Overload

Benjamin Marx and Lesley Turner

No 25905, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: What influences college student borrowing? In a field experiment with a large community college, we send emails about federal student loans to students who have received information about financial aid but have not made a borrowing decision. A treatment reminding students that they need not borrow the maximum amount of available loan aid does not affect borrowing. Treatments referencing amounts borrowed by recent graduates shift students from borrowing the maximum amount to not borrowing. Consistent with the hypothesis that students experience choice overload when observing multiple dollar amounts, the response is largest among low-performing students and arises from inaction.

JEL-codes: D12 D14 D91 H31 I22 (search for similar items in EconPapers)
Date: 2019-05
New Economics Papers: this item is included in nep-exp and nep-ore
Note: ED LS PE
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Citations: View citations in EconPapers (7)

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