​The Department of Education noticed that for loans granted to students without any strings,the average grade point average of the students decreases dramatically over time,while the students whose loans renew only if they pass their courses tends to stay stable.This could be due to a

A) ​Adverse selection problem
B) Moral hazard problem
C) Typical college life phenomenon
D) ​None of the above

Department of Education

A government agency responsible for national policies and programs that aid in American education.

Grade Point Average

A numerical assessment of a student's academic performance, averaged over a period, typically on a 4.0 scale.

Loans

Financial arrangements where a lender provides funds to a borrower with the expectation that the borrower will repay the principal amount plus interest or fees over time.