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The role of information in the take-up of student loans

Author

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  • Booij, A.S.
  • Leuven, E.
  • Oosterbeek, H.

Abstract

Policies need not only to be well designed to effectively address market failures, but their parameters also need to be part of agents\' information sets. We study student loan behavior in the Netherlands where i) higher education students know little about the conditions of the government\'s financial aid program and ii) take-up rates are low. We conducted a field experiment in which we manipulated the amount of information students have about these conditions. Half a year after the treatment the same students were interviewed again. The treatment has no impact on loan take-up. This zero impact is not due to students already having decided whether to take a loan or not, and can also not be attributed to treated students not absorbing the information that is given to them. We provide the interpretation that - given that aid application is sufficiently straightforward -communicating eligibility criteria rather than precise programme details should be prioritized.

Suggested Citation

  • Booij, A.S. & Leuven, E. & Oosterbeek, H., 2010. "The role of information in the take-up of student loans," Working Papers 32, Top Institute for Evidence Based Education Research.
  • Handle: RePEc:tir:wpaper:32
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    Cited by:

    1. Webley, Paul & Nyhus, Ellen K., 2013. "Economic socialization, saving and assets in European young adults," Economics of Education Review, Elsevier, vol. 33(C), pages 19-30.
    2. Damgaard, Mette Trier & Nielsen, Helena Skyt, 2018. "Nudging in education," Economics of Education Review, Elsevier, vol. 64(C), pages 313-342.
    3. Stoddard, Christiana & Urban, Carly & Schmeiser, Maximilian, 2017. "Can targeted information affect academic performance and borrowing behavior for college students? Evidence from administrative data," Economics of Education Review, Elsevier, vol. 56(C), pages 95-109.
    4. Andrés Barrios Fernandez, 2019. "Should I Stay or Should I Go? Neighbors' Effects on University Enrollment," CEP Discussion Papers dp1653, Centre for Economic Performance, LSE.
    5. Hämäläinen, Ulla & Koerselman, Kristian & Uusitalo, Roope, 2017. "Graduation Incentives Through Conditional Student Loan Forgiveness," IZA Discussion Papers 11142, Institute of Labor Economics (IZA).
    6. Gunnes, Trude & Kirkebøen, Lars J. & Rønning, Marte, 2013. "Financial incentives and study duration in higher education," Labour Economics, Elsevier, vol. 25(C), pages 1-11.
    7. Herber, Stefanie P. & Kalinowski, Michael, 2016. "Non-take-up of Student Financial Aid: A Microsimulation for Germany," Annual Conference 2016 (Augsburg): Demographic Change 145727, Verein für Socialpolitik / German Economic Association.
    8. Sandra McNally, 2016. "How important is career information and advice?," IZA World of Labor, Institute of Labor Economics (IZA), pages 317-317, December.
    9. Julie Janssens & Natascha Van Mechelen, 2017. "Who is to Blame? An Overview of the Factors Contributing to the Non-Take-Up of Social Rights," Working Papers 1708, Herman Deleeck Centre for Social Policy, University of Antwerp.
    10. Stephan Thomsen & Friederike von Haaren-Giebel, 2016. "Did tuition fees in Germany constrain students’ budgets? New evidence from a natural experiment," IZA Journal of European Labor Studies, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-25, December.
    11. Herber, Stefanie P., 2018. "The role of information in the application for highly selective scholarships: Evidence from a randomized field experiment," Economics of Education Review, Elsevier, vol. 62(C), pages 287-301.
    12. Frauke H. Peter & C. Katharina Spieß & Vaishali Zambre, 2018. "Informing Students about College: An Efficient Way to Decrease the Socio-Economic Gap in Enrollment: Evidence from a Randomized Field Experiment," Discussion Papers of DIW Berlin 1770, DIW Berlin, German Institute for Economic Research.
    13. French, Robert & Oreopoulos, Philip, 2017. "Behavioral barriers transitioning to college," Labour Economics, Elsevier, vol. 47(C), pages 48-63.
    14. Herber, Stefanie P. & Kalinowski, Michael, 2016. "Non-take-up of student financial aid: A microsimulation for Germany," BERG Working Paper Series 109, Bamberg University, Bamberg Economic Research Group.
    15. Saniter, Nils & Schnitzlein, Daniel D. & Siedler, Thomas, 2019. "Occupational knowledge and educational mobility: Evidence from the introduction of job information centers," Economics of Education Review, Elsevier, vol. 69(C), pages 108-124.
    16. Bonilla-Mejía, Leonardo & Bottan, Nicolas L. & Ham, Andrés, 2019. "Information policies and higher education choices experimental evidence from Colombia," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 83(C).
    17. Martin McGuigan & Sandra McNally & Gill Wyness, 2014. "Student Awareness of Costs and Benefits of Educational Decisions: Effects of an Information Campaign and Media Exposure," DoQSS Working Papers 14-19, Department of Quantitative Social Science - UCL Institute of Education, University College London.
    18. Barrios-Fernandez, Andres, 2019. "Should I stay of should I go? Neighbors' effects on university enrollment," LSE Research Online Documents on Economics 103426, London School of Economics and Political Science, LSE Library.
    19. Martin McGuigan & Sandra McNally & Gill Wyness, 2016. "Student Awareness of Costs and Benefits of Educational Decisions: Effects of an Information Campaign," Journal of Human Capital, University of Chicago Press, vol. 10(4), pages 482-519.
    20. Peter, Frauke H. & Zambre, Vaishali, 2017. "Intended college enrollment and educational inequality: Do students lack information?," Economics of Education Review, Elsevier, vol. 60(C), pages 125-141.
    21. Stefanie P. Herber & Michael Kalinowski, 2016. "Non-Take-Up of Student Financial Aid: A Microsimulation for Germany," SOEPpapers on Multidisciplinary Panel Data Research 844, DIW Berlin, The German Socio-Economic Panel (SOEP).
    22. Peter, Frauke H. & Zambre, Vaishali, 2017. "Intended college enrollment and educational inequality: Do students lack information?," EconStor Open Access Articles, ZBW - Leibniz Information Centre for Economics, pages 125-141.
    23. Marty McGuigan & Sandra McNally & Gill Wyness, 2012. "Student Awareness of Costs and Benefits of Educational Decisions: Effects of an Information Campaign," CEE Discussion Papers 0139, Centre for the Economics of Education, LSE.
    24. Serge Herzog, 2018. "Financial Aid and College Persistence: Do Student Loans Help or Hurt?," Research in Higher Education, Springer;Association for Institutional Research, vol. 59(3), pages 273-301, May.

    More about this item

    JEL classification:

    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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