To professionalize financial counseling calls for the professional design and implementation of a structured evidence-based counseling protocol that is consistently delivered and clearly targets measureable client outcomes. Program evaluation efforts can help determine counselor fidelity to protocol implementation as well as identify what protocol components may or may not have influenced client outcomes, positively or negatively. Conducting a professional third-party program evaluation that identifies the connection between program outcomes as a result of consistently delivered protocol components can enhance a financial counseling organization’s ability to demonstrate its value to funders and benefit to clients served. Implementation and adherence to a counseling protocol that consistently delivers the program’s “treatment” is a major standard in professionalizing financial counseling.

 

The Center for Excellence in Financial Counseling (CEFC) at the University of Missouri-St. Louis (UMSL) was founded and funded to develop ways of improving the quality and effectiveness of education and counseling that is available to consumers in financial distress. For its first initiative, the organization implemented a self-funded pilot program to help consumers who are behind on the repayment of their federal and private student loans, and who, as a result, may have fewer opportunities for financial advancement. This is the first such program in the country to help low- to moderate-income borrowers make informed choices about managing student loan debt.

 

From previous efforts in working with nonprofit financial counseling organizations to provide quality student loan borrower repayment counseling programming, CEFC learned that only providing training in student loan repayment options did not always result in borrowers receiving consistent or effective student loan repayment counseling. Counselors clearly needed support, guidance, and monitoring in consistently implementing the program’s diagnostic “checklist” for determining a borrower’s available federal repayment options. CEFC’s challenge was to design and implement a student loan borrower repayment counseling program protocol based on consistently applying the checklist of the borrower’s available federal repayment options and assure all borrowers received the same service “treatment.” A literature search for financial counseling models that guide consistent delivery of a protocol revealed that no evidence-based financial counseling models existed to serve as a framework for assuring all clients received the same counseling “treatment.”

 

Similar helping fields were explored to determine if an evidence-based counseling model existed that could be adapted to financial counseling. A health education behavior-change counseling model was identified for smoking cessation that had been generalized for other applications. The model utilizes collaborative goal setting to achieve self-management and empowerment, in addition to other beneficial features adaptable to motivating borrowers to take action to repay their student loans. A solution-focused exploration of a borrower’s available repayment options was designed and successfully delivered through this behavior-change counseling model which featured a strong emphasis on post-counseling follow up and confidence building. The counseling protocol was integrated into an electronic intake format that required counselors to collect specific borrower data to determine the borrower’s available federal repayment options as well as perform various behavior-change counseling communication tasks to develop the borrower’s repayment action plan steps. Essential checkpoints were identified within the intake and counseling process for monitoring the counselor’s performance and assuring all borrowers were exposed to the overall counseling protocol, including properly applying the federal repayment options checklist based on the borrower’s repayment status.

 

Counselors received counselor communications skills training designed and delivered by the UMSL Counseling and Family Therapy faculty that reinforced the implementation of the behavior-change counseling model. Intensive training in the technical aspects and implications of distressed student loans was provided by consumer law advocates.

 

CEFC’s student loan borrower repayment counseling pilot program was delivered by three first-rate financial counseling organizations in large and small metropolitan areas over a 25-month period. Each financial counseling organization was partnered with a local legal services organization which provided legal consultation for borrowers in need of legal assistance as well as served as a mentor for counselors.

 

Over 1,200 borrowers, owing a collective $65 million in student loan debt, were counseled during the pilot program. Roughly 80 percent of program borrowers attended a single session; 20 percent participated in multiple sessions. Eleven percent of program borrowers sought legal consultation.

 

To evaluate the program, borrower surveys were distributed to over 846 counseled borrowers who had consented to be contacted. Analysis of the 186 completed and returned surveys indicated:

• Nearly 39 percent of borrowers responded that they knew about their repayment options for their federal loans prior to counseling. As a result of the counseling, over 87 percent of borrowers indicated they felt better informed about their available federal student loan repayment options.
• Over 57 percent of borrowers responded that as a result of the counseling they changed their federal repayment plan because they qualified for a lower monthly payment amount.
• Nearly 74 percent of counseled borrowers responded that they agreed with the statement, “I wish I had found a counseling program like this sooner.”

 

The program evaluation was conducted by the Public Policy Research Center. The complete evaluation report is available at www.umsl.edu/~cefc/.

 

In addition, a session rating scale was developed by the Counseling and Family Therapy faculty to capture the borrower’s reaction to the counseling experience immediately following each counseling encounter. The scale asked borrowers to rate what was working for them and what was not working in four domains: borrower felt heard, understood and respected; worked on what borrower wanted to work on; borrower felt like he had a plan to repay his student loans; and the borrower’s sense of financial control was growing stronger.

 

Analysis of first session rating scale data indicated that 92 percent of respondents rated each domain with a score higher than 9 (out of 10). Analysis of second and multiple sessions rating scale data compared to first session response data showed an increase across all four domains.

 

With additional funding, CEFC plans to further test and evaluate the effectiveness of the student loan borrower repayment counseling program protocol delivered in a campus-based community counseling setting and follow borrowers’ repayment behavior over time.