UW-Madison’s Sara Goldrick-Rab is the principal investigator for a research award from the United States Department of Treasury.
The award is for project called, “Borrow$mart: A Field Study of an Online Financial Capability Tool’s Effects on the Schooling and Financing Decisions of Private-Sector College Students.” This project will examine the role of online financial counseling for college students who are at high risk of problems in the student loan market.
This field experiment will be conducted with 4,000 students attending DeVry University Online who are taking out federal student loans for the first time. Students will be randomly assigned to either a standard website that offers a basic explanation of how student loans work, or an enhanced interactive online counseling platform called Loanlook, which is designed to emphasize visual information and to guide students to information specific to their situation.
Goldrick-Rab is a professor of educational policy studies
and sociology, and is the director and founder of the Wisconsin HOPE Lab
, which was launched earlier this year
and is the only laboratory in the nation dedicated to translational research for improving equitable outcomes in postsecondary education. She also is a Senior Scholar at the Wisconsin Center for the Advancement of Postsecondary Education
and an affiliate of the Institute for Research on Poverty, Center for Financial Security, La Follette School of Public Affairs, and the Wisconsin Center for Education Research
The Center for Financial Security (CFS) at UW-Madison, which Goldrick-Rab is an affiliate of, received two research awards totaling $604,165 from the United States Department of the Treasury’s Financial Empowerment Innovation Fund. The Treasury Department made the announcement earlier this month at an open meeting of the President's Advisory Council on Financial Capability for Young Americans in Washington, D.C.
Out of 325 submissions and 11 finalists, CFS was the only applicant for the funds to receive multiple awards.
The Treasury’s Innovation Fund was created to develop, test, and evaluate new strategies for providing financial services and products that support consumers in making informed financial choices and promote their financial capability. The research supported by the Innovation Fund will inform policymaking efforts, as well as the efforts of the financial industry and community organizations.
In addition to the project being led by Goldrick-Rab, the other CFS initiative that is being supported by the Treasury funding is called, “My Classroom Economy: Developing Life-Long Financial Capability through Experiential Learning for Elementary Students.” This innovative program is designed to increase the financial capability of elementary school students.
With this program, fourth and fifth grade students practice making decisions about spending and saving while learning about the consequences of their choices in real time within their classrooms. J. Michael Collins will be the principal investigator. He is the faculty director of the Center for Financial Security and an associate professor in the School of Human Ecology at UW-Madison.