Demystifying College Costs: How Nudges Can and Can’t Help

Abstract: As US college costs continue to rise, governments and institutions have quadrupled financial aid. Yet, the administrative process of receiving financial aid remains complex, raising costs for families and deterring students from enrolling. In two large-scale field experiments (N= 265,570), we test the impact of nudging high-school seniors in California to register for State financial aid. We find that simplifying communication and affirming belonging each significantly increase registrations, by 9% and 11% respectively. Yet, these nudges do not impact the final step of the financial aid process -- college enrollment. In contrast, a simplified letter that affirms belonging while also making comparable cost calculations more salient significantly impacts college choice, increasing enrollment in the lowest-cost option by 10.4%. Our findings suggest that different nudges are likely to address different types of administrative burdens, and their combination may be the most effective way to shift educational outcomes.This work has been supported, in part, by the University of California Multicampus Research Programs and Initiatives grants MRP-19-600774 and M21PR3278