Increasing IDR applications among eligible student loan borrowers through targeted messages
Emails increase application submissions for income driven repayment plans
Student graduation
What was the challenge?
Student loan borrowers have over $1.26 trillion dollars in outstanding federal student loan debt. Income-driven repayment (IDR) plans can help Americans manage this debt by limiting their monthly payments to a percentage of their discretionary income and providing loan forgiveness. Despite these benefits, fewer than 24% of eligible student loan borrowers are in IDR repayment plans.
What was the program change?
We worked with ED’s Office of Federal Student Aid (FSA) to design and test the application of proven insights in updated emails sent to a number of different borrower groups eligible for IDR plans.
How did the evaluation work?
A total of 460,000 borrowers were randomly selected to receive either one of a series of emails or no emails.
What was the impact?
All emails sent to borrowers who had shown interest in IDR or were in financial hardship resulted in significantly more submitted IDR applications compared to the control group.