Helping Students Make Informed Borrowing Decisions with Career Outcome Information

Student loans can increase access to higher education, support college persistence and completion, and enable students to obtain high-earning jobs after college. But deciding whether and how much to borrow is a complicated endeavor filled with uncertainty, including over the returns to educational investment, which may vary by race and other attributes. We will test the hypothesis that providing accurate and timely information about future earnings has an effect on students’ borrowing decisions and, as a result, their academic outcomes. To do so, we will conduct a three-part pilot study at a university with approximately 9,000 undergraduates. We will first conduct a survey to understand students’ earnings expectations. Second, we will run an information experiment in which students will be randomly assigned to a control group and a treatment group that receives information on typical earnings for past students in their major, followed by a post-intervention survey to reassess earnings expectations. Our study will demonstrate how an expected earnings nudge will impact borrowing decisions, academic choices, and attainment.