How Text Messages Can Impact Student Loan Help
Earning a college degree is a great life experience. However, for many students, it's also a costly one. After all, student debt is continually rising and increasingly emerging as a policy concern. For this reason, some question the long-term effects on student borrowers. In particular, community college and for-profit students are at risk and in need of student loan help. Unfortunately, they often don’t have the resources necessary to understand the implications of a complicated loan origination process.
Student loan help and text messages
Andrew Barr, Kelli Bird, & Benjamin Castleman published a new working paper this week. Their research focused on student loan borrowing at the Community College of Baltimore County. Through Signal Vine’s platform, the researchers connected student loan applicants with financial aid counselors via text message. They gave students information about the borrowing process. Ultimately, this led to a significant decrease in student borrowing. In particular, black students, low-income students, and students with lower high school GPAs saw the highest impact.
“Our results show that community college students’ borrowing decisions are influenced by simplified information about the loan origination process and access to one-on-one financial aid counseling,” states the research. Furthermore, the familiarity and simplicity of texting is a great way to educate students about their loan borrowing habits and encourage them to make informed choices.
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