Providing financial literacy and student success training is a student loan default prevention best practice — and so is measuring and evaluating the results of your default prevention efforts.
But relying only on the final results of financial literacy and student success training isn’t the best way to prove that your efforts are achieving the goals you have for that training.
Of course you should look at future student success and loan repayment behaviors through traditional measurements like cohort default rates. But those freshmen who are learning life management skills now may not begin student loan repayment for years — and using future cohort rate data alone won’t help you in evaluating and sharing the progress of your financial literacy training in the near future.
What’s a financial aid professional to do, then, to ensure that the messages you’re providing to your students regarding financial literacy and student success are making a difference? And how do you prove to your school’s administration that you’re effectively promoting student success and meeting your financial literacy training goals?
Just as you should regularly analyze and measure your overall default prevention efforts to target your borrower outreach, you should evaluate and adjust your financial literacy efforts along the way.
The good news is that you don’t need to reinvent the wheel when establishing a plan for evaluating your financial literacy training. There are many models for evaluating learning and development, but I’ll share the plan that we’ve adapted to measure the effectiveness of USA Funds® Life Skills®, USA Funds’ financial literacy and student success program.
The majority of learning and development evaluation models build on Kirkpatrick’s Four Levels of Evaluation. That process looks at reaction, learning, behavior and results. Here’s how that might look when evaluating whether your financial literacy training is meeting its goals:
At the most basic level of measurement, you can show the number of students exposed to your financial management materials. How many students did you help?
Then evaluate students’ reaction to the training. For example, you could ask students in a post-presentation form whether the information presented in a financial literacy activity is relevant to them at this time.
To gauge learning, you could incorporate some type of assessment. You can conduct this assessment in a number of ways, some of which include a pre- and post-test to see what knowledge students gained. Or, you could simply offer a post-event assessment that checks for the specific learning outcomes you hoped to achieve.
Evaluating attitude and behavior requires following up at a later time. For example, if you taught students about education loans or managing their credit, administer a survey later to ask if they plan to make their student loan and other credit-related payments on time. Farther down the road, you can survey those students to ask: Did you make your first student loan payment on time? Have you had a late payment on your credit card in the last six months?
Each of those areas — reaction, learning and behavior — is important to measure and share throughout the process, to show the effectiveness of your work. Then you’ll be ready to look at results.
Here’s where the even longer-term measurements come into play. What are the financial implications of your training for the school? Did you reach your school’s default rate goals? Is your student retention improving?
How do you track and share the progress of your financial literacy training efforts at your school?