Implementation and data collection are underway.
September 2019 – September 2021; additional task order expected
Roughly two out of three students take out loans to pay for college, requiring them to make consequential decisions about how much to borrow and which type of loans. But many students lack the financial knowledge and skills to make good choices, underscored by the more than 500,000 who default on their loans each year. Colleges can only require federal loan borrowers to complete short, one-time counseling before receiving their loans ("entrance") and when they leave school ("exit"). To help these borrowers manage their debt, the Office of Federal Student Aid (FSA), under the Experimental Sites Initiative authorized by section 487A(b) of the Higher Education Act of 1965, is allowing colleges to require student borrowers to participate in additional annual loan counseling in the years between the already-mandated entrance and exit counseling. The Institute of Education Sciences is assessing the effectiveness of these waivers on students' borrowing and college progress and, later, loan repayment.
A total of 35 colleges volunteered to participate in the Loan Counseling Experiment. These schools estimated identifying approximately 100,000 students who were eligible to participate in the experiment between the 2017–2018 and 2018–2019 financial aid award years. Students were randomly assigned to either complete the additional required loan counseling (once per year) or not complete any additional counseling. Participating colleges had discretion over the content, and delivery of the loan counseling they could require, and report on it through an annual survey conducted by FSA. Students' borrowing and school progress will be measured using administrative records from the Office of Federal Student Aid (FSA). These data will be analyzed to address the evaluation's three research questions.
The first report for the study is expected in 2022 and will be announced on https://ies.ed.gov/ncee/.
Key findings will be available after a study report is published.