[lost_my_pwd]

Way down at the end of the page an "oh, by the way..." disclosure:

  After the program graduates pay 15% of their income for 2 years if they are earning over $40,000, capped at $30,000 total paid back to Modern Labor.

There is also the implication that a potential starting salary is $91,476:

  $91,476 The salary of an entry-level front-end developer (Source: PayScale, 2019)

Assuming that was somehow true...

  %15 * $92K * 2yr - ($2K/mo * 5mo) = $17.6K total cost of tuition

Looking around, ~$11.4K is the average tuition for a coding school, so this proposition works out to be a rather high interest loan (that can't be paid off early):

  $17.6K - $11.4K = $6.2K in interest
  $6.2K / $17.6K / 2yr = 17.6% APR

[tasuki]

The important difference being that with this program, you don't pay if it doesn't work out for you. The 17.6% APR is in case of a success - they just helped start your career. Seems well worth the greatly reduced risk!

[everdev]

> The 17.6% APR is in case of a success

If making $40k/year is "success". With your $6k payment on the $40k you made, your $34k is barely above the poverty line.

> Seems well worth the greatly reduced risk!

No, it doesn't. Just seems like a 300% repayment rate. I bet the number of software jobs starting under $40k is in the bottom 5%, maybe 1% of job listings. So, you're basically only mitigating risk if you can't find a job.

[smokeyj]

> So, you're basically only mitigating risk if you can't find a job.

Which is.. everyone starting a bootcamp!! Lol.

Who are you looking out for? You seem really concerned about the biblical application of usury laws. Do you know anyone who has zero technical skill and would LOVE to make 40k? I have a feeling you live in a very, very small bubble.

[everdev]

Just because you think someone is so poor they should be grateful for a 3x loan doesn't make it legal or right. That's the definition of loansharking. It's been a pervasive problem that increases economic inequality because only the poorest would accept a loan with those steep terms. Just because it's related to something positive like teaching people to code doesn't make the 3x payback and less burdensome.

I'm not so worried about this company in particular, but if this business model works, imagine desparate people signing up for a $100k loan and having to pay back $300k, or getting $300k for a house and having to pay back $900k.

It's the payback rate that's the problem.

I also don't think it's a bad thing to be concerned about other people in our community.

[Drdrdrq]

(I didn't downvote you FWIW)

The difference here is that the incentives of workers and this company are aligned. Either workers start making some serious wages and the company gets their money back (with interest), or both lose - worker their time, company their investment. Given the risk I don't think this is even close to usury. In fact, I would assume they are getting paid by the companies too, for privilege of getting the suitable candidates (which is not a problem in my eyes, if true).

Edit: and if they ever move their operations to EU I know a few people who would probably grab such a chance with both hands.

[gaspoweredcat]

i know a ton of people who would, as far as im aware the US is significantly cheaper than the UK in pretty much all areas, that $34k translates to about £25k which is not a bad basic wage. i imagine a lot of the people stacking shelves or cleaning toilets for minimum wage would much rather be coding for more money.

[jscholes]

> If making $40k/year is "success". With your $6k payment on the $40k you made, your $34k is barely above the poverty line.

The poverty threshold in the US for a single person under the age of 65 seems to be $13,064[1].

[1] https://www2.census.gov/programs-surveys/cps/tables/time-ser...

[sokoloff]

It's also a high-risk lending operation, and high-risk lending naturally comes with high interest rates. Maybe someone takes 6 months to find a job, now the interest rate is under 7%.

I think that tying your own financial reward to the financial success of your graduates is perfectly OK, perhaps even desirable.

[dragonwriter]

> Looking around, ~$11.4K is the average tuition for a coding school, so this proposition works out to be a rather high interest loan (that can't be paid off early)

You are paying extra in the hoped-for successful case in return for paying less if the whole thing turns out to be a bust. Or, equivalently, you are paying a lot extra for a portion of the tuition (which is, in fact, a straight $20,000—the $30,000 maximum minus the $10,000 stipend) to be due over time after completion, repaid on an income contingent basis, and foregone in part or in whole if after-program income isn't at least $200K over two years.

[soneca]

But that does not need to be paid if you do not get a well-paying job after it

[everdev]

I would not call $40k/year a well-paying software job.

[EpicEng]

Sure, but a loan you don't repay unless you get placed and make above a certain threshold. They're removing the risk for you and you pay for that once you're able.

I agree that the salary estimate is high, and I wouldn't hire a remote junior dev, but still; you're paying nothing up front and they're handing you $2k / month.