I've read that the ink on newspaper can be harmful to their respitory systems! Maybe you can try using washable towles?
I've used carefresh, eco bedding, aspen chips and any combination of the three. I think carefresh had the worst odor when dirty but eco bedding is a bit harder, so it might be uncomfy on the ratties feet! My ratties didn't mind the eco bedding. They opt to sleep on hard surfaces anyway!
I'm unsure if you already know but NO pine or cedar bedding no matter what!!
shredded paper would worry me as a bedding and it wouldnt absorb well and the odor would reek. as a digg box, i think it should be ok. just watch what papers go in it. but even with that, i'm not 100% possitive.
ginger & loco love having newspaper in their cage. i use it to line the bottom but loco ends up shredding it and it gets mixed in with the tissues as part of their bedding. most newpapers should be printed using non-toxic ink now anyway (i used to work at a newspaper).
Take a box or Tupperware container (the bigger the better) and cut a hole in the lid just big enough for your rats to get in and out of. Fill it loosely to the top with SAFE shredded paper and treats mixed in. They love it.
For safe paper, I have always used clean new unbleached computer paper put through the shredder. Does that sound safe to everyone? I researched it and it seemed okay...