Increasing Enrollment in Income-Driven Student Loan Repayment Plans: Evidence from the Navient Field Experiment

Abstract

We report evidence from a randomized field experiment conducted by a major student loan servicer, Navient, in which student loan borrowers received prepopulated applications for income-driven repayment (IDR) plans. Treatment increased IDR enrollment by 34 percentage points relative to the control group. Using the random treatment assignment as an instrument for IDR enrollment, we furthermore provide local average treatment effect (LATE) estimates of the effects of IDR enrollment on new delinquencies, monthly student loan payments, and consumer spending. Our study is the first field-experimental evaluation of a U.S. government program designed to address the soaring debt burdens of U.S. households.