Deferred tuition coding bootcamp model should be a textbook example of moral hazard/adverse selection.
If you’re in my financial position, or yours? Sure, we’d be hesitant to trade away a percentage of salary for two years (capped at $30k total) once you’re making $50k+. In our students’? They don’t have that luxury.
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They do want a job but not as hard as someone who has paid actual cash to get the skills and gets to keep all of their future pay.
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You’re assuming they come from equivalent economic circumstances
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You have two students of equivalent skill. One has been working in an Amazon warehouse making $11/hr. The other working in SAAS sales making $90k/yr. Former on deferred tuition, latter pays cash. A jr eng role comes along for $80k/yr. Who is more likely to take it?
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I don’t see exactly the point of this example. I think the right perspective is to focus on an arbitrary (but fixed) profile and consider how one’s incentives are affected by a given set of terms.
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Ok, look at it from the perspective of a brilliant student who is making $11/hr. You want to go to school to become a software engineer. Pay upfront? Impossible. Loans? Too risky (risk 100% of annual salary?) Income share agreement? Doable
End of conversation
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As a data point, the average Lambda School student increases his or her income by more than $50k/yr as a result of Lambda School. What they pay us is capped at $30k total. Extrapolate that over 40 working years, and you’re looking at a multi-million dollar swing for <=$30k
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