An Evaluation of Youth Financial Capability Program

Background/Purpose:  The purpose of this study was to evaluate the effectiveness of MyPath Credit on developing financial capability for low-income young adults between ages 18 and 24. This program evaluation is significant because MyPath Credit is among few efforts that facilitate credit maintenance and savings targeted at young adults in the phase of transitioning from education to employment.  Efforts targeted at youth financial capability are especially important because youth financial literacy is low and employment is declining.  Research questions included: 1.) How do participants credit scores change after 6 and 12 months of participating in MyPath Credit?, and 2.) How do participants financial knowledge and attitudes change over the same time period?  

Methods:  The program includes an interagency partnership that provides financial loans and knowledge through workshops and individual financial coaching.  This summative evaluation study assessed the success of MyPath Credit in promoting financial capability among 18 to 24 aged youth at Year Up Bay Area’s IT and QA program with one group pre and posttest design.  The program was implemented and data were collected between September 2013 and September 2015. Participation rates in the Fresh Start Loan program (i.e. collateral loans to bolster credit and save simultaneously) among the Year Up students ranged from 25% to 50%.

MyPath Credit collected participants FICO credit scores at three different time periods: 1) during the first 3 months after a Year Up student agreed to join the Fresh Start Loan program before the participant started making their first monthly payments, 2) after making 6 months of monthly payments of the loan, and 3) after completing 12 months of monthly payments (N=121). Participants consist of 3 cohorts and the number of each cohort was 25, 42, and 54. Data on attitude and knowledge indicators were collected from one cohort (N=112) at baseline and 12 months through a pencil and paper survey.

Results:  In baseline, 50.4% of 121 participants had no credit score and 29.3% of the participants had credit scores below 670. After 6 months of loan repayments, every participant had credit scores equivalent to bad (40.7%) or good credit (53.7%). The results of paired group t-tests on credit scores in baseline, 6 months, and 12 months of participation in MyPath Credit showed that there was a significant difference in participants’ credit scores between baseline and 6 months and between baseline and 12 months.

There was a statistically significant difference in participants’ financial knowledge, and self-efficacy between baseline and 12 months of MyPath Credit. However, participants’ financial attitudes did not differ by completion of the program.  

Conclusions and Implications: Findings could be used to support additional low-income youths potential to become financially self-sufficient through obtaining good and/or clean credit scores.  MyPath Credit exhibits several strengths; recognition and understanding of demographic characteristics of participants, monetary and educational supports/assistance.  MyPath Credit could be considered a model program for other community-based organizations that support low-income youth.  Similar practices in identifying needs, curriculums, interagency collaborations, and incorporation of targeted outcomes could be adopted to strengthen other programs.