Of course, both types of funding can be benevolent and/or predatory depending on how you structure the terms, just like anything else. Unfortunately, our laws don't do a very good job of educating or warning young adults who are all entering predatory loan agreements that can't be voided even in bankruptcy.
If a person's new grad salary is high enough to pay off student loans inside of 2 years, then this arrangement is a lot worse financially than a simple student loan. The job market for CS, also makes it so, that a loan is pretty low risk. a half-decent job is nearly guaranteed.
Flip the major to something with a lot more income insecurity, and these schemes make sense.
> Vemo Education, which vets students at Purdue and a handful of other schools on behalf of potential investors.
This statement does worry me though. It seems like they would only invest in a candidate if they were already on their path to success. These candidates were probably never at risk of not paying their student loans in the first place. I wonder if they expanded their pool to more risk prone students, would such an investment system be sustainable at all ?