The role of misperceptions for student aid take-up

Half of the eligible students do not take up their financial aid entitlements. Our study of 22,000 students in Germany shows that most eligible non-recipients are unaware that they are eligible, underestimate how much student aid one can receive and how much parents are allowed to earn, and they systematically overestimate the repayment amount. A targeted information intervention reduces these misperceptions substantially and leads to significantly more student aid take-up, especially among socially disadvantaged students. Receiving student aid increases disposable income and disburdens parents.