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ERIC Number: ED671830
Record Type: Non-Journal
Publication Date: 2021-Apr
Pages: 51
Abstractor: As Provided
ISBN: N/A
ISSN: N/A
EISSN: N/A
Available Date: 0000-00-00
The Effects of Default Choice on Student Loan Borrowing: Experimental Evidence from a Public Research University. EdWorkingPaper No. 21-382
Dennis A. Kramer II; Christina Lamb; Lindsay C. Page
Annenberg Institute for School Reform at Brown University
We explore the role of defaults and choice architecture on student loan decision-making, experimentally testing the impact pre-populating either decline or accept decisions compared to an active choice, no pre-population, decision. We demonstrate that the default choice presented does influence student loan borrowing decisions. Specifically, compared to active choice, students presented within a pre-populated decline decision were almost five percent less likely to accept all packaged loans and borrowed between 4.6 and 4.8 percent less in federal educational loans. The reductions in borrowing appears to be concentrated within unsubsidized loans with those assigned to the opt-in condition borrowing 8.3 percent less in unsubsidized loans. These changes in borrowing did not induce substitution towards private or Parent PLUS loans nor did they negatively impact enrollment, academic performance, or on-campus work outcomes in the same academic year.
Annenberg Institute for School Reform at Brown University. Brown University Box 1985, Providence, RI 02912. Tel: 401-863-7990; Fax: 401-863-1290; e-mail: annenberg@brown.edu; Web site: https://annenberg.brown.edu/
Publication Type: Reports - Research
Education Level: Higher Education; Postsecondary Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: Annenberg Institute for School Reform at Brown University
Grant or Contract Numbers: N/A
Author Affiliations: N/A