Students at the United States Naval Academy have the opportunity to take a “Career Starter Loan.” Two military-oriented banks provide these loans exogenously at a low interest rate that does not depend on individual credit scores. Using survey data, this paper examines investment behavior in...

We examine decision making by a group of college students who have the opportunity to take out a sizable, very low-interest, non-credit dependent loan which, if simply invested in low-risk assets, would effectively yield a free lunch in net interest earnings. We exploit this natural experiment...