Tertiary Education Completion and Financial Aid Assistance: Evidence from an Information Experiment

Understanding the role of information among disadvantaged students is crucial in explaining their investment decisions in higher education. Indeed, information barriers on the returns and the gains from completing college may explain a substantial share of variation in students' degree completion. We conduct a field experiment with 7,806 university students in Italy who benefit from financial aid assistance, by providing information, either on the labor market returns of completing college or on the education returns of meeting the academic requirements attached to the financial aid. Our results suggest that only the latter information treatment has a positive effect on academic performance, increasing the number of credits obtained by around 3, and by decreasing the probability of dropout by around 4 percentage points. We also find that the results are mediated by an aspiration lift generated by our treatment.