IDEAS home Printed from https://ideas.repec.org/p/mpg/wpaper/2025_11.html
   My bibliography  Save this paper

Reducing Inequality by Correcting Misperceptions: Experimental Evidence on Student Aid Take-Up

Author

Listed:
  • Sebastian Riedmiller

    (Max Planck Institute for Research on Collective Goods, Bonn)

Abstract

Financial student aid improves educational outcomes and reduces social inequality, yet many eligible students do not take it up. To examine whether correcting misperceptions increases take-up, I conducted an RCT with 6,225 university students across Germany who were not receiving aid. I find that 63% of students systematically underestimate the financial benefits and overestimate repayment obligations of student aid, and 86% misperceive their eligibility. Providing combined information about the program conditions and individual eligibility significantly corrected misperceptions after six months and increased take-up by 46% after one year. This increase is particularly strong among disadvantaged students. After take-up, students report higher available income while reducing earnings and parental support. These findings suggest that correcting misperceptions can reduce social inequality by alleviating financial constraints among disadvantaged students and their parents.

Suggested Citation

  • Sebastian Riedmiller, 2025. "Reducing Inequality by Correcting Misperceptions: Experimental Evidence on Student Aid Take-Up," Discussion Paper Series of the Max Planck Institute for Research on Collective Goods 2025_11, Max Planck Institute for Research on Collective Goods.
    • Handle: RePEc:mpg:wpaper:2025_11
    as

    Download full text from publisher

    File URL: https://www.coll.mpg.de/pdf_dat/2025_11online.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mpg:wpaper:2025_11. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marc Martin (email available below). General contact details of provider: https://edirc.repec.org/data/mppggde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.