Financial Coaching for Low-Income Adults
Consumer Financial Protection Bureau / MDRC · United States (multiple cities) · 2015
Summary
The CFPB financial coaching trial found meaningful improvements in credit scores, savings balances, and bill payment behavior at 12 months, with effect sizes larger than online financial education. The 19-point credit score gain is economically meaningful — enough to improve loan terms for many participants. The study is notable for its rigorous multi-site design and for demonstrating that brief, personalized coaching outperforms information provision alone. The finding has been replicated in multiple city financial empowerment programs, particularly those targeting community college students and recent immigrants.
Research question
"Does one-on-one financial coaching improve financial outcomes for low-income adults?"
Methodology
Intervention
6-month financial coaching program: monthly 1-hour sessions with trained coaches on budgeting, debt management, and savings goals; vs. access to online financial education resources
Assignment
Randomized controlled trial (client)
Sample size
946 participants across 5 sites
Primary outcome
Credit score; savings balance; bill payment timeliness
Effect estimate
Credit score: +19 points at 12 months; savings: +$168 median; bill timeliness: +11 percentage points
Decision
CFPB expanded financial coaching grant program nationally; coaching model integrated into several city financial empowerment programs
Result
Positive
Credit score: +19 points at 12 months; savings: +$168 median; bill timeliness: +11 percentage points
Evidence strength
Strong
Randomized controlled trial with large sample.
Replication status
Partially replicated
Institution
Consumer Financial Protection Bureau / MDRC
Location
United States (multiple cities)
Year
2015
Policy area
Financial Services
Mechanism
Human capital