Can Targeted Information Affect Academic Performance and Borrowing Behavior for College Students? Evidence from Administrative Data


Christiana Stoddard, Carly Urban, Maximillian Schmeiser


Economics of Education Review


More students than ever borrow to finance post-secondary education. However, students receive little information during the course of their college career that encourages them to recalibrate loan amounts and to consider academic and borrowing decisions jointly. This paper exploits a natural experiment to understand how targeted information can change student behavior. We study a large public university where students above a given debt threshold received letters with bundled information on student loan debt and effectively completing college, while students below the threshold did not. Using a difference-in-difference strategy and administrative data on individual-level academic records and borrowing, the intervention did not change borrowing in the subsequent semester but improved academic outcomes: credits completed and GPAs increased in the subsequent semester and retention rates increased. We appreciate the assistance of Deputy Commissioner Tyler Trevor at the Office of the Commissioner of Higher Education of Montana, Carina Beck, Director of the Allen Yarnell Office of Student Success, and Kayla Fields, Financial Education Program Manager, at Montana State University. We are also grateful for the comments and suggestions provided by Mark Anderson, Brian Cadena, J. Michael Collins, Jen Doleac, Alice Henriques, Joanne Hsu, Lindsay Jacobs, Rebecca Lessem, Annamaria Lusardi, Katherine Michelmore, Milica Mormann, Justin Sydnor, Sarah Turner, Basit Zafar, and seminar participants at the Boulder Summer Conference on Financial Decision Making, the Cherry Blossom Financial Education Institute, the Institute for Research on Poverty Summer Conference, the University of Illinois at Chicago, Utah State University, the CSWEP Public Economics Session of the Annual ASSA Meetings, the Federal Reserve Bank of Philadelphia Payments Conference, and the Asoociation for Education Finance and Policy Conference. We also acknowledge the support of the Spencer Foundation in funding this research (Grant no. 201600092). A special thanks to Christian Cox for providing excellent research assistance. This research is exempt from the requirement of Institutional Review Board review [CU082415-EX]. This research was done prior to the time Schmeiser joined Amazon Lending, when he was a Principle Economist in the Microeconomic Surveys Section at the Federal Reserve Board.



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