NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Student Loan Choice Overload

Benjamin M. Marx, Lesley J. Turner

NBER Working Paper No. 25905
Issued in May 2019
NBER Program(s):Economics of Education Program, Labor Studies Program, Public Economics Program

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.

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Document Object Identifier (DOI): 10.3386/w25905

 
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