The role of information in the take-up of student loans
By Edwin Leuven with Adam S. Booij and Hessel Oosterbeek
Economics of Education Review 31 (1), Feb 2012, pages 33-44.
We study student loan behavior in the Netherlands where (i) higher education students know little about the conditions of the government's financial aid program and (ii) take-up rates are low. In a field experiment we manipulated the amount of information students have about these conditions. The treatment has no impact on loan take-up, which is not due to students already having decided to take a loan or students not absorbing the information. We conclude that a lack of knowledge about specific policy parameters does not necessarily imply a binding information constraint.