Money Health

Assessing the Social Impact of Freedom Debt Relief

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Executive summary of the research study by the L. William Seidman Research Institute at the W.P. Carey School of Business, Arizona State University

Since the financial crisis 10 years ago, the composition of consumer debt has changed dramatically. Then, excessive debt was tied to mortgages. Now, Americans owe nearly five percent more to creditors than they did at the onset of the financial crisis. This increase in overall consumer indebtedness is driven by increases in student loan debt, auto loan debt and credit card debt.

Unsecured debts like credit card debt are eligible for debt settlement programs, which involve a company negotiating with a creditor on its client’s behalf to reduce the amount that client owes to the creditor. The negotiated settlement payment is processed to the creditor from the client’s special purpose account, into which the client consistently deposits funds throughout the duration of their program. Each debt the client has enrolled in the program is negotiated one at a time, until all the client’s debts are resolved.

Freedom Debt Relief (FDR) is the largest debt settlement company in the U.S. Freedom Debt Relief has enrolled over 600,000 clients since its inception in 2002, and the company has settled over $10 billion in debt. On average, each FDR client enrolls about $32,000 in debt and deposits $525.00 monthly to their special purpose account. All debts that are enrolled in the program are typically resolved within 24-48 months.

The principal objective of the study titled Assessing the Social Impact of Freedom Debt Relief was to measure the impacts of the Freedom Debt Relief program on clients’ financial and emotional health using two established academic measures: the Financial Capability Scale and the Perceived Stress Scale. The Financial Capability Scale (FCS) was used to measure financial capability of individuals with consumer debt and the Perceived Stress Scale (PSS) was used to measure the perception of stress in individuals with consumer debt. The study compared results from graduates of the Freedom Debt Relief program with results from individuals with debt hardship who qualified for the FDR program, but who chose not to enroll.
Freedom Debt Relief graduates are those clients who have completed their FDR program and resolved all their enrolled debt.

The data point to three key findings. Compared to those who never enrolled in the program:

  1. Freedom Debt Relief graduates are significantly healthier financially.
  2. Freedom Debt Relief graduates are significantly less stressed about their finances.
  3. Freedom Debt Relief graduates feel significantly better about their personal lives.

Significantly Healthier Financially: Financial Capability Scale (FCS)

Overall, Freedom Debt Relief graduates scored significantly better (24% higher) on the FCS than those who never enrolled, indicating that they are more financially capable.

Significantly Less Stressed: Perceived Stress Scale (PSS)

Freedom Debt Relief graduates scored significantly better (21% lower) on the PSS than those who never enrolled in the program, indicating they feel less stressed.

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Freedom Debt Relief graduates also scored significantly better than those who never enrolled on all individual stress factors in the PSS.

Freedom Debt Relief graduates feel significantly less:

  • upset because of something that happened unexpectedly
  • nervous or stressed
  • that difficulties are piling up too high to overcome
  • that they are unable to control the important things in their lives

Freedom Debt Relief graduates feel significantly better about their personal financial situation versus those who never enrolled in the program.


The results of “Assessing the Social Impact of Freedom Debt Relief” gives us comprehensive data on the financial and emotional health of individuals who enroll and complete the Freedom Debt Relief program. Freedom Debt Relief graduates are more financially capable, feel less stressed, and feel better about their personal lives than those who qualified but never enrolled in the program. These test results, combined with the reduction of all the debt they enrolled in the program, clearly show that Freedom Debt Relief clients benefit from debt settlement.

Freedom Debt Relief graduates are more financially capable, feel less stressed, and feel better about their personal lives than those who qualified but never enrolled in the program.

Download the full Arizona State University research results.

Michael Micheletti serves as the Director of Corporate Communications at Freedom Financial Network where he is responsible for the strategic communications planning, knowledge dissemination and outreach to key consumer audiences. Before joining Freedom he held a variety of high profile communication and consumer education roles focusing on healthcare, tax and housing. He is a former reporter for FOX News, CNN and served as news director for Clear Channel Radio San Francisco.