Behavioral nudges prevent loan delinquencies at scale: A 13-million-person field experiment.

ABSTRACT: Americans collectively hold over $1.6 trillion in student loan debt, and over the last decade millions of borrowers have defaulted on loans, with serious consequences for their financial health. In a 13-million-person field experiment with the U.S. Department of Education, we tested the effectiveness of different email interventions to inform borrowers about alternative repayment options after a missed loan payment. Our interventions tested whether sending monthly behaviorally-informed emails, providing follow-up reminders, framing benefits in percentage (vs. dollar) terms, and providing just one recommended action step at a time (vs. two) affected borrower outcomes. We find that i) behaviorally-informed emails reduce estimated 60-d delinquencies by 0.42 pp, ii) reminders boost the efficac

SUBMITTER: Kuan R 

PROVIDER: S-EPMC11789030 | biostudies-literature | 2025 Jan

REPOSITORIES: biostudies-literature