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The Effects of Default Choice on Student Loan Borrowing

Last registered on April 22, 2019
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Pre-Trial

Trial Information

General Information

Title
The Effects of Default Choice on Student Loan Borrowing
RCT ID
AEARCTR-0004123
Initial registration date
April 22, 2019

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
April 22, 2019, 11:21 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
United States of America
Region

Primary Investigator

Name
Dennis Kramer
Affiliation
University of Florida
Contact Primary Investigator

Other Primary Investigator(s)

Additional Trial Information

Status
On going
Start date
2018-05-01
End date
2019-05-15
Keywords
Education
Additional Keywords
Default Choice, Student Loans, Higher Education, Experiment
JEL code(s)
D12, D14, D91, I22
Secondary IDs
Abstract
We explore the role of defaults and choice architecture on student loan decision-making, experimentally testing the impact of opt-in and opt-out decision environments compared to an active choice environment. We demonstrate that the default choice presented does influence student loan borrowing decisions. Specifically, compared to active choice, students presented within an opt-in decision environment where almost five percent less likely to accept all packaged loans and borrowed 3.3 percent less in federal educational 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.
External Link(s)

Registration Citation

Citation
Kramer, Dennis. 2019. "The Effects of Default Choice on Student Loan Borrowing." AEA RCT Registry. April 22. https://doi.org/10.1257/rct.4123-1.0
Former Citation
Kramer, Dennis. 2019. "The Effects of Default Choice on Student Loan Borrowing." AEA RCT Registry. April 22. https://www.socialscienceregistry.org/trials/4123/history/45326
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Random assignment of default choice to student loan decisions
Intervention Start Date
2018-07-01
Intervention End Date
2018-08-31

Primary Outcomes

Primary Outcomes (end points)
Academic year total, subsidized, and unsubsidzed loan borrowing. Private and ParentPLUS loan borrowing.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Downstream enrollment, academic, and on-campus work outcomes.
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
New and returning undergraduates will be randomly assigned to one of three default choice conditions.
Experimental Design Details
Randomization Method
Randomization through R randomizr package and blocked on the following characteristics: 1) prior loan borrowing levels and 2) year in school.
Randomization Unit
Student
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
No clusters
Sample size: planned number of observations
12,000
Sample size (or number of clusters) by treatment arms
12,000
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
MDES 0.054 between each experimental group and the control group.
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
UNiversity of Florida
IRB Approval Date
2016-11-21
IRB Approval Number
IRB201601926
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials