Coding bootcamps are revolutionary and bring about the promise of big salary jumps. While earning potential is high, to join a bootcamp attendees potentially have to shell out big bucks. For many bootcamp hopefuls, this proves to be a deterrent, but it doesn’t have to be. Programs like income share agreements and good ole’ fashioned student loans can help cover the costs. So which method is right for you? Here are a few factors to consider.
Repayment Terms
One of the main differences when it comes to income sharing program versus student loans is the process of repayment. Bootcamp attendees repay income sharing agreements (ISAs) after obtaining a job. Most agreement issuers will give the borrower a certain period of time to find a job (anywhere from 3 months to a year). In this sense, ISAs sometimes prove to be more beneficial than student loans, as not all student loans have a grace period! Regardless whether you have found a job, you must repay student loans soon after graduation (with exceptions for deferment or grace periods).
Interest Rates
If you’ve taken out loans in the past, you’re probably familiar with interest rates. Traditional student loans have set interest rates and may be subsidized if you borrow through government programs. Income sharing takes an entirely different approach. Upon signing an ISA, you consent to pay the lender an established percentage of your salary for a certain repayment term. Many ISAs are contingent on employment and may even wait to take that cut of your salary until you’ve reached a certain income threshold. Repayment plans vary drastically, with the borrower generally taking somewhere between 8%-25% of your salary per year. Contract lengths can range from 1 to 4 years.
Which One Is Right for Me?
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Well, that’s a good question! There’s really no clear winner between income sharing and student loans. The choice comes down to your own situation.
One thing to keep in mind is your expected income and how the ISA’s percentage will affect that. For example, 18% of a $100,000 annual salary is $18,000. If your contract was for 2 years, then you’d end up paying $36,000. However, if your salary was only $40,000, you’d only be paying $14,400 in a two year span. That said, student loan rates could be even higher or not end up covering the entire cost of your education. Regardless of your choice, one thing is certain: having options is never a bad thing! ISAs provide potential coders yet another vital resource to help them advance their education and take control of their careers.
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