4 ms·
> How do you know that your graduates are or aren't making more than 50k? Great question. In addition to our income share agreement, each student submits a for
by austenallred 9y ago
> How do you know that your graduates are or aren't making more than 50k?
Great question. In addition to our income share agreement, each student submits a form to the IRS that will essentially copy us on their taxes. We have annual reconciliation based on those numbers to see if they match a student's self-reported numbers.
> You're essentially giving your students a loan and then having them repay it once they start earning money.
Eh, kind of. The biggest difference is if they don't get a job that pays $50k+ they don't pay us. Also, if you ever lose a job, your payments stop until you're back on your feet.
It's an equity instrument, and we think it's much better and more forgiving than loans as a result of that.
- jbob2000 9y agoAh cool! I was curious about the income thing, thanks for sharing!
- mkagenius 9y agoIf that's a step function, then people would be happy earning $49,999 than $60k (and may even try to negotiate with the employer to reduce the salary)
- austenallred 9y agoI suppose that's a risk we have to take, though being willing to forgo $10k of income for two years ($20k) in order to avoid paying $20k seems a little silly; all you'd gain are the taxes, but you'd also have a hard time getting a raise, etc.
- JavaOffScript 9y agoUnless they form a contract with their employers saying they will take 49,999 for 2 years with a guaranteed raise to 60k at the end. Employer saves money, employee saves money, school gets screwed...
- austenallred 9y agoIf that's how you want to optimize your life, congratulations. You cheated the school that gave you a chance out of a few thousand dollars. Might be smarter to just get paid more :)
- brlewis 9y agoThe way I read it you collect 17% once they start earning $50k+. Do you really collect nothing if their first two years are below?
- austenallred 9y agoIf they make <$50k we wait until they're making more, for up to five years. We will keep trying to get them a high paying job the entire time.
- jrowley 9y agoBut then the student is caped at $49k for life, when they should be able to double or triple that salary over 20 years, which will easily pay off the loan.
- _jordan 9y agoWhat is a student decides not to pursue software engineering? Do you still take your cut? In my experience, the market is oversaturated with code bootcamp grads; many of them decide to go back to their previous profession.
- austenallred 9y agoWe only take a percentage if you get a career in software engineering, so we have built that kind of risk into our model.
- koolba 9y agoIs there a time limit after which the debt is forgiven? What prevents someone with no intention of finding a job of signing up for the free education? EDIT: I'm entirely serious about part two. I know quite a few people that would love to learn programming but, AFAIK, have no intention of working in the tech world. I could see them taking advantage of something like this. Most of them work in non-tech functions in an office environment. So learning programming would be useful to them but it's not their actual job.
- austenallred 9y agoThe income share is forgiven after five years. Hopefully we can weed those types out in application process.
- Amygaz 9y agoYou know me? I'am considering taking CS as a part-time education, but I have no intention of becoming a software engineer.
- koolba 9y agoExactly. There's tons of people like that. Not sure how they'd filter them from the rest. There's a lot of careers where it'd be incredibly useful too. Even just basic data munching with awk/sed puts a person light years ahead of people stuck with Excel copy pasta.
- newmanships 9y agoCame across your site the other day. I was wondering is the 17% from their base salary before taxes? So they (if in say California) pay federal, state, & you guys off the top? Great idea either way!
- austenallred 9y agoBefore taxes.
- mobilefriendly 9y agoI applaud your effort and am interested in how you're working out the tax implications. $17,000 doesn't come of the top in reality, for the marginal $50k person you'd be taking nearly 1/2 of their take home pay. Seems like a longer repayment would be more fair. Also if you forgive the $30,000 that's still a taxable event for the student; they'd owe the IRS as through you'd given them the money, might cost the student $10,000 or more depending on the person's situation.
- sanderjd 9y agoNote: 17%, not 17,000. So $8,500 for a person making $50k. But 17% does seem a bit high to me, pre-tax.
- movedx 9y ago> ... if they don't get a job that pays $50k+ they don't pay us. Also, if you ever lose a job, your payments stop until you're back on your feet. This is how it works in the UK and Australia with normal student debt. It's deferred until you're earning enough money and then is taken directly out of your pay cheque. Collection of the debt is also held off until you're earning a certain amount (in any field.) > ... each student submits a form to the IRS that will essentially copy us on their taxes. So it's not a truly universal online training environment, then? As a British citizen living in Australia, I can't file a form with the IRS, nor would I give the IRS my details for obvious reasons.
- austenallred 9y agoWe're still figuring out the details outside of the US.
- _kyran 9y agoYou might find the value proposition a bit different where governments pay for student tuition.
- austenallred 9y agoWhile that's generally true, the proposition of 6 months vs 4 years is also valid.
- movedx 9y agoThanks. Honestly as someone who never went to university (I never finished school), is self-taught in C, assembly, HTML, CSS, JavaScript, Python, Go, and so on, and is now a Senior Site Reliability Engineer, I think your product is excellent. I was even considering asking to see what jobs you have on, but I don't have a degree, so yeah. Keep up the good work. I hope you're successful.
- dakna 9y agoWhat about married people that are jointly filing taxes, will you take only the income of the person attending the school into account?
- austenallred 9y agoYes, that's exactly what we do.
- justonepost 9y agoIt's fing brilliant. You guys are heros, don't let anyone say anything different. This sort of thing really changes the world when your goals are aligned like this. Just.. wow.
- MarkMc 9y ago> It's an equity instrument, and we think it's much better and more forgiving than loans as a result of that. I wonder whether this type of financing is more acceptable to Muslim students. Do most Muslims in the US avoid traditional student loans which charge interest?