Can targeted information affect academic performance and borrowing behavior for college students? Evidence from administrative data

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. (C) 2016 Elsevier Ltd. All rights reserved.