Hacker News Reader

Comment by everdev | Hacker News Reader

I'm glad to see Income Share Agreements (ISAs) as #1. They're a tax on the poor and just as bad if not worse than predatory student loans.

This "don't pay unless you get a job education model" costs you far more than those who have the means to pay for a bootcamp outright.

BTW, as someone who hires developers at all talent levels I'd never put any value in a diploma, from an Ivy League or a boot camp. The only thing I want to see is the most interesting thing you've built recently. From there we can talk technical details and cultural fit.

View on HN

> I'm glad to see Income Share Agreements (ISAs) as #1. They're a tax on the poor and just as bad if not worse than predatory student loans.

They’re a loan that you don’t need to pay back unless you’re making money. The idea that they’re as bad as a normal student loan let alone a predatory one is nuts.

Certainly they should be capped so there’s a maximum amount you’l you can possibly end up paying, not uncapped like App Academy’s but you’d have to have a very high proposition of an income share or an extremely long term for them to be as bad as a standard student loan.

Some collect $40-60k over the life of an ISAs while normal tuition is around $10-15k.

If the ISA is capped at the tuition or sightly higher it's a wonderful program. Very few are.

Student loans are often predatory but I'm not sure if any topically collect 4x the total tuition over the life of the loan.

I know multiple people who could not have attended a bootcamp if not for ISAs. I also know one who could afford to pay but still chose to go the ISA route. They are all happy-to-thrilled with the model. I would love to know your reasoning for describing them as "just as bad if not worse than predatory student loans". I can't conceive of a worldview where that would be true, so I think I'm missing something in your perspective.

Thanks for being inquisitive.

It's easy to look at this as giving education to those who wouldn't get it otherwise.

But there is a dark side: https://medium.com/@kevgardner83/the-true-cost-of-income-sha...

> The average up-front tuition amount for coding bootcamps is $10,000 to $15,000, according to Course Report, which collects data and reviews on coding bootcamps. The idea to not pay thousands of dollars at the start of the program may be attractive. But, let’s say you agree to an ISA. And after completing the a coding bootcamp, you’re hired with a salary of $60,000 a year. If you pay 20 percent of your salary for four years, you’ll end up paying $48,000. That’s more than four times the average cost for an up-front payment to a coding bootcamp.

It's basically charging those with the least money more tuition. It would be fine if they capped it at the tuition price or even a nominal interest rate, but some programs make 400% more from students that can't afford upfront tuition.

It's fine if you want to charge everyone in your bootcamp under the ISA model, but if you offer a $10k tuition and a $40k ISA you're basically offering the same product at vastly different prices to two different economic groups.

> It's basically charging those with the least money more tuition.

It's charging those who are less risk accepting more money, but risk aversion is a reasonable thing to pay a premium for. Its perfectly reasonable to view $48,000 if it gets me a job paying $60,000 a year for four years as being a better deal than $10,000 unconditionally.

OTOH, a high ISA multiplier should be a sign of a low expected successful placement rate.

> Its perfectly reasonable to view $48,000 if it gets me a job paying $60,000 a year for four years as being a better deal than $10,000 unconditionally.

True, but I doubt you could find hiring data that supports a 4x higher employment rate among ISA cohorts.

If bootcamps wanted to publish they're employment rate and average salary for both cohorts so students could do the math that would be better.

My guess is employment and salary are much more tied to ability and location than thyey are to wether you opt in to an ISA.

> True, but I doubt you could find hiring data that supports a 4x higher employment rate among ISA cohorts

Sure, but the disutility of a $12,000 bill for four years when making $60,000 may be much less than five times a single $10,000 bill when making whatever you’d make if the bootcamp didn't payoff. The impact of $1 isn't equivalent across different income circumstances. You have to account for both success rate and declining marginal utility of income with greater income.

This seems to be more a concern on the terms rather than the instrument. You can structure any financial instrument (ISA, loan, whatever) to be predatory if you're willing to play with the variables sufficiently.

I don't know if those are real terms in your example, but they do seem pretty bad. (Although still better than a predatory loan IMO, since they are contingent on the student actually having a somewhat successful outcome).

By contrast, something like Lambda's ISA ($30k max payment vs $20k upfront tuition; 15% of income for two years; min $50k/y salary as software engineer) strikes me as not predatory in any way -- I would guess they make less money from their ISA students on average than from their tuition-paying students.

Yeah 50% more is still high but not as bad as 400+%.

What sorts of things are you looking for as far as "cultural fit" is concerned?

Reply on news.ycombinator.com