The effect of reduced student loan borrowing on academic performance and default: Evidence from a loan counseling experiment

• 成果类型: Article
• 署名作者: Barr, Andrew; Bird, Kelli A.; Castleman, Benjamin L.
• 署名单位: Texas A&M University System; Texas A&M University College Station; University of Virginia
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2021.104493
• 发表日期: 2021
• 关键词: Student loans; Higher education

摘要

Student loan borrowing for higher education has emerged as a top policy concern. We conducted an experiment to evaluate the impact of an outreach campaign that prompted loan applicants at a large community college to make informed and active borrowing decisions. The intervention led students to reduce their unsubsidized loan borrowing by 7 percent. This resulted in worse academic performance, and increased the likelihood of loan default during the five years after the intervention occurred. Our results suggest policy makers and higher education leaders should carefully examine the potential unintended consequences of efforts to reduce student borrowing, particularly in light of growing evidence regarding the counter-intuitive positive relationship between reduced borrowing levels and worse student academic and financial outcomes. (c) 2021 Elsevier B.V. All rights reserved.