Innovations in Student Loan Repayment

Commonwealth is partnering with ASA (American Student Assistance) to test Rules of Thumb for student loan repayment behaviors with recent college graduates.

As of 2015, more than 41 million Americans collectively owed a total of more than $1.2 trillion in student loan debt. Nearly 25% of those borrowers are delinquent or defaulting on their debt, forming a collective total of $175 billion in unpaid debt.

Through this partnership we are testing if Rules of Thumb - simple, actionable messages that can guide and simplify decision-making and action taking – can make an impact on the repayment behaviors of borrowers.

Starting in January, 10,000 borrowers working with ASA will take part in the study. After the testing period, we will measure whether the borrowers who received Rules of Thumb had improved repayment behaviors. We will design rules of thumb to motivate borrowers on standard repayment plans to pay more than the minimum payment, and borrowers who are delinquent to begin paying again.

Click here to learn more about Rules of Thumb for Student Loan Repayment.

If you’re interested in learning how Rules of Thumb are designed, check out our new toolkit.

To learn more about the previously studied effects of Rules of Thumb on credit card payments, read a report we co-wrote with our partners at the Urban Institute.

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