Risk vs Reward: 2022 to Signal the End of the Shell Game with Bootcamps
January 16, 2022
The expectation around post-secondary education has traditionally been a high barrier to entry. Prospective students face high costs, significant loans, and delaying their careers to focus on learning full time, the top concern being cost, all of which render it inaccessible to many.
Digital learning has been the fastest growing market in education, with a 900% growth since 2000, yet the cost of college continues to increase, outpacing inflation AND family income over recent decades.
With COVID-19 negatively impacting in-person learning rates, students are asking if post-secondary education is worth the risk and cost.
From Nucamp’s inception in 2017, our mission has been to make education accessible to everyone. Those who are serious about making education accessible need to be serious about making education affordable.
However, what we’ve seen from the coding bootcamp space has largely been something else. In an effort to address the cost barrier, coding bootcamps have introduced Income Share Agreements (ISAs), where students trade a percentage of their future income over 3-5 years for a 14-20 week coding bootcamp.
This removes the up-front cost risk of the barrier, however, the high risk remains even though it’s spread out over time. If a job doesn’t work out, they still have to pay it back. ISAs are in a legal grey area that is too open to interpretation and they’ve faced criticism for being predatory and unfair.
Part of the effort to attract students to high-cost bootcamps with ISAs is the strategy of advertising high job placement rates, on the theory that a likely job placement will make it easier to pay back the tuition loan through an ISA. These statistics, however, have come under scrutiny and investigation in recent years.
In light of recent scrutiny and lawsuits, we’ll see more regulatory powers place bootcamps’ claimed graduation and job placement rates under the microscope, which will diminish the attractiveness of ISAs. This will strongly encourage bootcamps to be more accurate and forthright about what they are claiming or face potentially steep consequences.
While Nucamp does not promise jobs, we report on whether graduates are using the skills they learned in the workplace within 6 months. These Job Skills Rates and Graduation Rates, based on graduate surveys, are updated daily and are publicly available on our website going back to April of 2021.
Another alternative to addressing the accessibility issue is the adoption of the Revature model of learning in the US, where students are placed into minimum-wage tech training programs, then upon graduating are placed in a job with a below-average salary where they have the opportunity to “pay back” their education. However, if the graduate quits before their two-year contract expires, they could be on the hook for $36,500. The high demand for low-cost skilled labor makes these graduates who are tied up in the contact attractive hires and therefore will be a growing trend in 2022.
Like ISAs, the Revature model is essentially moving the risk around, like a shell game, where students are left guessing about the risk versus reward.
The volume of apprenticeships being offered compared to a decade ago is significant, with new government support and new investors aiming to bring apprenticeships to tech. The apprenticeship model shifts the risk of high-cost education away from the student/employee to the employer, in exchange for a below-average salary and on-the-job training. Graduates from high-quality, low-cost bootcamps such as Nucamp will be very attractive to these employers seeking to recruit already skilled individuals in order to reduce their risk.
Featured image: Julia M Cameron, Pexels.