The Effects of State Mandated Financial Education on College Financing Behaviors
نویسنده
چکیده
Students entering college have limited financial experience while making complex borrowing decisions. This paper examines a policy lever that may improve these decisions: high school personal finance graduation requirements. We use a difference-in-difference strategy exploiting differential timing of state mandates and a sample of incoming freshmen at four year institutions in the National Postsecondary Student Aid Study. Our results suggest financial education graduation requirements increase aid applications and federal loans, while decreasing private loans and the likelihood of holding credit card balances. However, the federal loan increases are concentrated among students from less affluent family backgrounds, while the private loan decrease comes from a separate population of students from more affluent families. The mandates do not change institutional choice or college attendance.
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