[FennNaten]

So, basically, your company is part school, part loan agency. The loan business is offering to students a loan which covers scholarship in the school + 10k, and then bets on the job market for interests at 2 years terms.

This way to put it is sure less appealing than "we pay you to learn" but closer to the actual business model.

Looks like you could have partnered with an existing program (or several) for the teaching part, and only run the lending/revenue sharing. What pushed you towards handling the school yourselves? More confidence in the results? Difference in the legal/financial stuff due to the business structure? PR value? Taste for teaching? Bit of all that? Something else?

[asd33313131]

I think we would put it more like staffing platform + a trainee/school program. But we combined them because we saw a gap in the market. Pure schools need to make money on the school portion (they have to have high gross profit per student). A lot of schools hover around 50% gross profit per student. So we thought, if are able to integrate vertically (and have both school and staffing platform), we can finance the school portion extremely aggressively (and scale really really fast), and meanwhile actually turn a profit on the staffing platform side. That's the business model reason.

The second reason is that we think that by paying people to finish tasks, assignments, and learning material, we can actually incentivize completion in a much cheaper way than employing a lot of supervisors. So not only are we able to grow faster because of our integration (like above), we can be more efficient at producing students. I think if we weren't trying to scale extremely fast and sustainably we would probably focus on the training portion.

[FennNaten]

I see. It makes sense, I'm curious to see how it will evolve.

[ummonk]

It’s more of an investment in the person than a loan. Analogous to debt vs equity financing.

A loan is bad because it doesn’t align incentives as much and pushes risk onto the borrower.

[FennNaten]

Agreed that it looks more like an investment plan than a loan, especially with the funds being unlocked gradually upon completion of assignments and courses attendance.

My point was that if you strip out the marketing "good intentions" part (not saying that the good intention aren't there), then this looks like a financial product of sort. Which made me wonder why bother combining the financial part with the school. But I got the answer about that.

Note that I'm not in the US, so I can't really get a feel of how risky this is for the student. Is 40k/y a common starting salary for a beginner or is it usually higher? 15% is due when you get to 40k salary, so that would leave you at 34k/y. Is that comfortable, or is that 6k loss hard to absorb?

I guess that depends a lot on the location?