Abstract
This study shows that although in theory students are capable of making simple payoff calculations and choosing the optimal choice, when it comes to student loans, they are unable and/or unwilling to extend those calculations to complicated examples that incorporate uncertainty and resemble real life. A probit regression finds that academic standing, time spent at a community college and the amount of loans already taken to date influence students’ rationality to achieve the optimal payoff.
Recommended Citation
(2012)
"Can Undergraduate Students Make Optimal Decisions about Student Loans?,"
Journal of Economics and Finance Education: Vol. 11:
Iss.
1, Article 2.
Available at:
https://scholarship.rollins.edu/jefe/vol11/iss1/2
