[caddytodaddy]

There’s lots of things to reasonably debate about this. This is already an accepted practice for coding boot camps like AppAcademy, which I attended. At the time I couldn’t get a good job and was running out of savings. I was an adult cleaning golf clubs with high school students. Couldn’t get anyone to even look at my resume. AppAcademy’s application was purely merit based, they just wanted to know you could solve problems and think. After the program you pay 15% if your income for the first year, if you could get a job that paid over 50K a year.

I got in. I remember I was telling some millionaire member of the club what I would be doing and he told me that he thought that was illegal and they were ripping me off. I genuinely liked most of the members, but I really wanted to tell that guy some very rude things.

It changed my life. By the next spring I had a great job I loved that was paying me way way more than the golfing club. I had to pay 30% of my first 6 months instead of 15% over the full year, which is tough after taxes. Take home pay was like 45% of my paycheck. But even during that first 6 months I was making way more than I would have otherwise. I’d do it again in a heartbeat.

Bottom line, I got a chance I wouldn’t have gotten otherwise. There’s plenty of ways to take advantage of desperate people. The term could have been longer, the rate higher. It could turn into a type of slavery. But if these things are limited in some way they can be a good thing. Especially if they time out, and are subject to you actually being paid. Then they are better than most other loans, and the people who you owe have interests that are slightly more aligned with yours.

That program has changed a bit since I went through. Also, I think the biggest drawback was I was expecting them to really help me get a job, but it was more throw us all out there and see who sticks. So, probably much less ideal in fields without the same insatiable demand for workers.

[b_tterc_p]

Any instrument can be made favorable. You can calculate out expected values. Sounds like yours was a reasonable deal.

But... assuming they don’t set prices using things other than degree, and that they’re priced to be on average equally profitable with an equivalent loan, you’ll be better off getting this arrangement if you expect to earn less than your average peers, and worse off if you expect to earn more. It’s basically a case of moral hazard. Long term you would expect people with less fiscally ambitious goals to pursue this (e.g. those who want to do more charitable, less fiscally rewarding careers) which means the average rate of return would need to be more punishing than traditional loans.

Mostly this just seems ripe for abuse against the loan providers to me, and that the terms will be made very unfair to compensate.

[cowpig]

I'm curious: how much was AppAcademy was responsible for you getting a job?

What do you think your odds would have been if, e.g. you did a coursera track or followed some online tutorials to build your first app instead?

[caddytodaddy]

They didn’t help much at all, but the program was still new. Their support might be better now, not sure. I do think taking the program highly highly increased my chance of employment. I would not have made the right choices about what to take, my pace would have been much slower, and my self confidence for actually applying for jobs would have been way less. I am confident about this because I was taking Coursera courses and online tutorials before the AppAcademy program. Coursera is awesome and I learned some great stuff. I also realized that I was good at programming, which gave me the confidence to apply to AppAcademy. But AppAcademy was truly a boot camp, very intense, and pushed me through everything I needed to get a job. And I was also contractually obligated to at least try to get a job.