3 ms·

Am I reading this right? You have to pay 2.5% of your income for 7 years as a comp sci graduate for a loan of only $10k. Seems like a pretty terrible deal. Ed

by sct202 8y ago

Am I reading this right? You have to pay 2.5% of your income for 7 years as a comp sci graduate for a loan of only $10k. Seems like a pretty terrible deal. Edit: Avg comp sci grad salary from Purdue is $72k, assuming 5% raises on average including promotions, you'd pay about $14.6k for this loan, which is roughly equivalent to a loan with an 11% interest rate per year over 88 months. Edit2: I was a business major, and if I used the finance major's payment percentage and term length, I would have paid $20k back over the term of 8 years which is basically like a 20% interest rate per year.

barry-cotter 8y ago
It is a terrible deal. Lambda School’s stipend programme (places limited) pays students $2,000 a month for the nine months of their job training, while they get trained 40 hours a week and that includes interview prep and placement and job search help that makes university careers offices look like they’re going through the motions, not trying to get the students a job. And after paying students $18,000 and spending nine months getting them job ready and helping them find a job they only have to pay back > Upon completion of the program, students will pay 10% of their salary for a five year period once they're making at least $50,000 per year. The max possible payment is capped at $50,000. https://lambdaschool.com/stipend/ https://lambdaschool.com/stipend/ Or if you don’t get the stipend > There are no up-front costs required to attend Lambda School; we only get paid when you do. Once you’re earning at least $50k per year you’ll pay back 17% of your income for the first two years. > Total tuition possible is capped at a maximum of $30k, so no matter how much you’re getting paid the most you could possibly pay is $30k. https://lambdaschool.com/about/ https://lambdaschool.com/about/
- RankingMember 8y ago
  This seems pretty amazing. If anyone who's gone through this program sees this, what's the catch/is there a catch? Seems almost too good to be true.
  - toast0 8y ago
    Do they also get a payment from the employers (like a staffing agency would?)
  - Matticus_Rex 8y ago
    They're a YC company. I've seen their students on Twitter talking about how it transformed their lives. I think it's just the first salvo in a disruption that's been waiting to happen for a while.
- eosophos 8y ago
  Just went to apply, but seems they shut down the stipend applications for now because of overwhelming interest.
IMTDb 8y ago
You are comparing a loan to an equity. The ROI on equity usually is higher than on a loan, if all goes well. But the risks are higher. In this case, if you graduate AND work AND at an average salary AND have no health problem, you payout will be higher than on a loan. But if any of these condition is not met (eg: you have trouble finding a job, your starting salary is lower than expected, ...) then you don’t have to pay as much. It’s more expensive in a best case scenario, but much more comfortable and safer in any other case. The risk is shared between you and the « lender ».
sushisushisushi 8y ago
Yeah but imagine how awesome higher education will be with private equity/VC firms determining how to price-discriminate majors in order to increase their returns
jeffchien 8y ago
I think this analysis is missing the main point of this kind of agreement, and that is that in the worst case scenario -- the graduate can't find employment, or income can't support the student loan payments -- this agreement should be better than straight loans. From another article [1]: "At Messiah College, students who opt for the school's ISA will pay between 3 and 3.5 percent of their future income for a set period of time. Payments are waived if a graduate's salary drops below $25,000 a year." (Of course, I don't know if this example is representative of all of these agreements) On one hand, I could see this working for students going for degrees with less job certainty than comp sci. But on the other hand, this does seem like treating a symptom rather than the causes, like we're encouraging too many people to go for degrees that don't lead to gainful employment or self-sufficiency. [1] https://www.usnews.com/education/best-colleges/paying-for-college/articles/2018-09-26/using-an-income-share-agreement-to-pay-for-college https://www.usnews.com/education/best-colleges/paying-for-co...

by sct202 8y ago

barry-cotter 8y ago

It is a terrible deal. Lambda School’s stipend programme (places limited) pays students $2,000 a month for the nine months of their job training, while they get trained 40 hours a week and that includes interview prep and placement and job search help that makes university careers offices look like they’re going through the motions, not trying to get the students a job. And after paying students $18,000 and spending nine months getting them job ready and helping them find a job they only have to pay back > Upon completion of the program, students will pay 10% of their salary for a five year period once they're making at least $50,000 per year. The max possible payment is capped at $50,000. https://lambdaschool.com/stipend/ https://lambdaschool.com/stipend/ Or if you don’t get the stipend > There are no up-front costs required to attend Lambda School; we only get paid when you do. Once you’re earning at least $50k per year you’ll pay back 17% of your income for the first two years. > Total tuition possible is capped at a maximum of $30k, so no matter how much you’re getting paid the most you could possibly pay is $30k. https://lambdaschool.com/about/ https://lambdaschool.com/about/

RankingMember 8y ago
This seems pretty amazing. If anyone who's gone through this program sees this, what's the catch/is there a catch? Seems almost too good to be true.
- toast0 8y ago
  Do they also get a payment from the employers (like a staffing agency would?)
- Matticus_Rex 8y ago
  They're a YC company. I've seen their students on Twitter talking about how it transformed their lives. I think it's just the first salvo in a disruption that's been waiting to happen for a while.
eosophos 8y ago
Just went to apply, but seems they shut down the stipend applications for now because of overwhelming interest.

IMTDb 8y ago

You are comparing a loan to an equity. The ROI on equity usually is higher than on a loan, if all goes well. But the risks are higher. In this case, if you graduate AND work AND at an average salary AND have no health problem, you payout will be higher than on a loan. But if any of these condition is not met (eg: you have trouble finding a job, your starting salary is lower than expected, ...) then you don’t have to pay as much. It’s more expensive in a best case scenario, but much more comfortable and safer in any other case. The risk is shared between you and the « lender ».

sushisushisushi 8y ago

Yeah but imagine how awesome higher education will be with private equity/VC firms determining how to price-discriminate majors in order to increase their returns

jeffchien 8y ago

I think this analysis is missing the main point of this kind of agreement, and that is that in the worst case scenario -- the graduate can't find employment, or income can't support the student loan payments -- this agreement should be better than straight loans. From another article [1]: "At Messiah College, students who opt for the school's ISA will pay between 3 and 3.5 percent of their future income for a set period of time. Payments are waived if a graduate's salary drops below $25,000 a year." (Of course, I don't know if this example is representative of all of these agreements) On one hand, I could see this working for students going for degrees with less job certainty than comp sci. But on the other hand, this does seem like treating a symptom rather than the causes, like we're encouraging too many people to go for degrees that don't lead to gainful employment or self-sufficiency. [1] https://www.usnews.com/education/best-colleges/paying-for-college/articles/2018-09-26/using-an-income-share-agreement-to-pay-for-college https://www.usnews.com/education/best-colleges/paying-for-co...