Aside from that, you're essentially giving your students a loan and then having them repay it once they start earning money. How is this any different than a regular student loan (but with way more risk on your end)?
Great question. In addition to our income share agreement, each student submits a form to the IRS that will essentially copy us on their taxes. We have annual reconciliation based on those numbers to see if they match a student's self-reported numbers.
> You're essentially giving your students a loan and then having them repay it once they start earning money.
Eh, kind of. The biggest difference is if they don't get a job that pays $50k+ they don't pay us. Also, if you ever lose a job, your payments stop until you're back on your feet.
It's an equity instrument, and we think it's much better and more forgiving than loans as a result of that.
Might be smarter to just get paid more :)
What prevents someone with no intention of finding a job of signing up for the free education?
EDIT: I'm entirely serious about part two. I know quite a few people that would love to learn programming but, AFAIK, have no intention of working in the tech world. I could see them taking advantage of something like this. Most of them work in non-tech functions in an office environment. So learning programming would be useful to them but it's not their actual job.
This is how it works in the UK and Australia with normal student debt. It's deferred until you're earning enough money and then is taken directly out of your pay cheque. Collection of the debt is also held off until you're earning a certain amount (in any field.)
> ... each student submits a form to the IRS that will essentially copy us on their taxes.
So it's not a truly universal online training environment, then? As a British citizen living in Australia, I can't file a form with the IRS, nor would I give the IRS my details for obvious reasons.
Honestly as someone who never went to university (I never finished school), is self-taught in C, assembly, HTML, CSS, JavaScript, Python, Go, and so on, and is now a Senior Site Reliability Engineer, I think your product is excellent. I was even considering asking to see what jobs you have on, but I don't have a degree, so yeah.
Keep up the good work. I hope you're successful.
I wonder whether this type of financing is more acceptable to Muslim students. Do most Muslims in the US avoid traditional student loans which charge interest?
> How do you know that your graduates are or aren't making more than 50k? How do you know that you're getting your 17%?
you can ask students to fill out and sign, as a condition of admission, forms authorizing the IRS to hand over their tax returns, in advance. it wouldn't be very hard to contract with a law firm to take the results and check to see if they had more than 50k of income, while ignoring/discarding all other information.
or just have them sign a thing saying they'll do X. if they lie, they're probably committing fraud. most folks don't run around committing high dollar fraud.
> Aside from that, you're essentially giving your students a loan and then having them repay it once they start earning money. How is this any different than a regular student loan (but with way more risk on your end)?
the point of this model is to lower risk for the student, and hope that the value you're providing is sufficient to offset the additional risk you're accepting.
Lambda School is six months long, online, and teaches CS fundamentals (computer architecture, operating systems, C++) in addition to full-stack web development and mobile development.
Lambda School also doesn't require a deposit.