As many higher education institutions strive to help their students become effective leaders, student leadership development models have begun to emerge from transformational leadership theories which emphasize relational leadership. While these models suggest that awareness of one's strengths contributes to effective leadership, they do not provide substantial evidence to confirm this claim. This study sought to corroborate the assertion that strengths awareness contributes to leadership effectiveness. The study investigated the degree to which strengths ownership, psychological capital (PsyCap) qualities of hope, self-efficacy, optimism, and resiliency, and demographic characteristics of gender, college class level, leadership experience, and strengths experience are predictive of effective leadership practices as defined by the Leadership Challenge model. Participants included 153 students in leadership positions in student development programs in five colleges and universities. All participants had completed the Clifton StrengthsFinder earlier in their college experience. Participants completed the Self-form of the Student Leadership Practices Inventory (SLPI), the PsyCap Questionnaire, and the Strengths Ownership scale. In addition, Observer-forms of the SLPI rating the effectiveness of the student leader were completed by an organizational advisor and at least two peer “followers.” Criterion variables consisted of student leader, organizational advisor and peer scores on the SLPI and each of its five scales. Hierarchical multiple regression was utilized to analyze the contribution of psychological capital variables and strengths ownership to student leader ratings of effective leadership. Findings indicated that Hope scale scores most strongly predicted effective leadership ratings on the total SLPI score and all but one of the SLPI scales. Self-efficacy and Optimism scores were each significant predictors on two of the SLPI scales. These psychological capital qualities emphasize goal-directed thinking similar to the goal-oriented practices emphasized in the Leadership Challenge Model. Strengths ownership did not significantly predict student leadership effectiveness ratings. Gender was a significant predictor on two SLPI scales. Limited variance in organizational advisor and peer ratings of student leader effectiveness resulted in minimal ability to explore predictors of varying responses. The results of this study demonstrate the importance of impacting the growth of hope and goal-directed thinking in college students through leadership development programs.