Graduation Year


Document Type




Degree Granting Department


Major Professor

Alan R. Hevner, Ph.D.

Co-Major Professor

Timothy M. Papp, D.B.A.

Committee Member

Matthew T. Mullarkey, Ph.D.

Committee Member

Jung Chul Park, Ph. D.

Committee Member

Charles F. Arant, D.B.A.


Default Option bias, Design Science Research (DSR), Elaborated Action Design (EADR), Status quo bias


The Purpose of Research is to determine why student loan borrowers are making poor decisions regarding their repayment plan selection and how we could use the theory of nudge to get them to make better choices. This study evaluates three main biases found in decision making to determine which one is most likely to be utilized in making decisions. It also investigates ways a tool can be created to allow borrowers to make better choices.

I use the Elaborated Action Design Research Methodology to diagnose, design and implement an effective tool. In my study, I create an artifact that allows me to create nudges for better repayment selection and a secondary artifact that helps me to determine if the biases I believe to be affecting decision making are accurate. I also create a calculator to determine which repayment option that is available to the borrower is best based on their individual goals. An interview of 41 University of South Florida students is used to obtain their feedback on which selections they would make and why.

My research contributes to the student loan industry. Much discussion exists about issues within the industry regarding repayment of student loans and the number of borrowers who default. In my professional life, I have observed that many who default or struggle with repayment of loans do so because they simply are in the wrong payment program and do not get the right advice to select the appropriate option. The government puts everyone into a standard option automatically (Default Option), forcing them to determine what, if any, better options exist for them. If we could simply select the correct option for their needs and circumstances from the beginning, much of the issue with default and past due payments could be resolved.

I conclude there is evidence that supports those who are given a Default option tend to choose or stay with that option because of several factors. These factors include believing this option is best for them and making complex decisions can be overwhelming, causing some to make no decision at all. My findings also determine that Social Norm and Warning nudges can be very powerful when given a complicated choice to make.