For Daniel Michael, the realization that his life was about to seriously change hit almost as soon as Covid-19 entered the United States.
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“I’m a musician. Or at least I was before Covid,” he told us.
The pandemic was spreading like wildfire, and restaurants, bars, clubs, and concert halls—which were all once filled with music—had closed. Crowds, the lifeline of the live music industry, were forced to disperse.
“I was in a band…We actually got signed by a local music label, but that was a month before Covid hit. So, when it spread, the deal fell through. The music scene crashed once Covid [cases] started rising. And as much as I like music, I knew the music industry is only safe until it’s not.”
The live music industry became one of the first casualties of the pandemic. With physical distancing as the people’s first defense against the airborne virus, live music will likely be one of the last industries to recover. Fortunately for Daniel, he found a way to get back up. Determined to secure his future, Daniel traded his pen for a keyboard, and instead of writing lyrics, he started writing code.
Switching Genres: Daniel’s Journey to Coding
For Daniel, the quiet music halls served as a sobering wake-up call to change careers. “I knew I had to be in an industry that I don’t just like but can also rely on.” Daniel found the stability he was looking for in the tech industry, and it isn’t surprising why.
In the year since the pandemic devastated economies, the tech industry suffered around 137,000 job losses. Although that may seem like a lot, it’s actually small when compared to the 2.1 million jobs lost for professional and business services and the 1 million jobs lost in the state and local government.
The wide berth between tech and other industries’ job losses reflects tech’s resilience, even in the face of a pandemic. And while that might be enough to convince some people to switch to tech, Daniel had a deeper reason behind the move.
“I always loved computers. I built my first computer when I was 14. I know that’s more of physical [hardware] building but I enjoyed doing it. I thought, ‘Okay, why not build software this time?’” And so he did. But just as his venture into music was unconventional, so was his journey to coding. Having once pursued a music degree at a community college, Daniel, once more, took the road less traveled.
“I joined General Assembly and took the Software Engineering Immersive online,” Daniel said. “I liked the school’s Dash program, which was like the precourse where they introduce you to coding. The material was very straightforward. It wasn’t too much but it wasn’t too little either.”
General Assembly is one of the oldest and largest skills-based training providers in the United States. A decade in existence, the school boasts a range of training programs for anyone looking to break into tech. Backing up its intensive coding program is an affordable way to finance one’s education: the income share agreement (ISA) loan.
“The school introduced me to the ISA,” Daniel said. “And at that point in my life, I felt that I just couldn’t pass on that.”
Income Share Agreement: Terms, Conditions, and All that Jazz
To understand Daniel’s story, let’s back up a minute and go over what an ISA is. Put simply, an income share agreement is a type of loan between a school and a student where, instead of paying tuition out of pocket, the student pays with a promise.
That promise usually comes with several conditions that vary by school and program, but the gist of it is this: The school agrees to finance your education throughout your chosen program. In exchange, you promise that once you’re earning above a certain gross monthly income, you’ll pay a set percentage of your earnings to settle the debt of your tuition. Put another way, the ISA follows a ‘learn now, pay later’ policy.
To the casual reader, learning about the ISA loan, or any other unfamiliar financial product, may sound intimidating. But it shouldn’t be. To start, let’s talk about a few features of income share agreements.
- ISAs Expire
An income share agreement loan, unlike a traditional student loan, does not take decades to fulfill. A 2019 study conducted by insurance company New York Life revealed that traditional student loans take an average of 18.5 years to complete.
ISAs generally take half of that to complete, with others, such as General Assembly’s, taking less. ISAs usually have a payment window, too. If participants don’t fulfill their ISA before the payment window closes, their agreement expires, as long as they’ve complied with the terms of their contract.
- ISAs Align Cost with Job Outcomes
An income share agreement loan, unlike a traditional student loan, does not put all of the financial risks in the student’s basket. Instead, it holds the school accountable for the education it provides. Why is this distinction important?
The question of whether the cost of education should correspond with job outcomes has made the rounds for several reasons. The most pressing one is this: schools don’t shoulder any risks associated with traditional student loans, even if the quality of education they provide fails to prepare students for gainful employment. This becomes a problem especially among student borrowers from low-quality schools, who are essentially set up for failure and crippling debt.
- ISAs Don’t Discriminate
For students at trade schools and skills-based training providers, federal student loans may be unavailable. To complicate matters, even private loans may be limited. That’s especially true for students with imperfect credit histories or non-U.S. resident statuses.
As a result, students who draw away from the traditional four-year learning path may end up facing more difficulties in pursuing their education. A case in point: in 2018, General Assembly published a report highlighting the impact of the limited access bootcamp students have to education-financing tools.
“Unlike traditional graduate school programs, General Assembly students are not eligible for loan deferment as they work to build new, career-relevant skills,” the report said. “As a result, students with limited credit history, a handful of penalties due to late payments, or other debt obligations are unable to secure financing—perpetuating a cycle that keeps them underskilled and underemployed.”
ISAs typically follow this formula, but terms and conditions vary by school. So, how does General Assembly’s ISA program set students up for success?
Income Share Agreements in Play
Daniel enrolled in General Assembly’s Software Engineering Immersive Online in October of 2020, just as coronavirus cases began surging again in the US. Unable to pay for his education out of pocket, he was presented with the ISA, one of General Assembly’s financing options offered under the Catalyst Program.
The program was General Assembly’s response to students who said they lacked resources and viable financing options. Despite its promise, Daniel initially reacted to the ISA option with skepticism—a welcome, if not an encouraged, sentiment in the face of something that could potentially make or break his future.
“I was so aware of the fact that I was taking a risk by choosing a field where I have zero experience. When I went to college for music, it didn’t feel as risky because I’ve been singing all my life. But the tech industry was new to me. I knew anything can happen,” Daniel admitted.
“I was afraid that I would not be successful at my bootcamp program. I was afraid that I would leave midway. I thought, ‘Okay, what if I do leave? What happens then?’ I was never going to give up anyway, but I always had that ‘what if’ in my head.”
“I guess another concern was how lenient the ISA would be with deferment. Like, if I don’t get a job, what’s going to happen then? Luckily, the school was actually good with clearing that up for me.”
Let’s clear it up for you.
Focus on Class, Not Costs
Echoing Daniel, the ISA was “simple and straightforward.” General Assembly’s ISA Catalyst Program can be summarized in five points.
- While you don’t pay for the full tuition upfront, you do pay a deposit of $250. That’s all you pay while you’re enrolled in the program.
- After you leave the program, you have a payment-free grace period during which you secure a job. General Assembly has a Job Placement Program that helps boost your chances of landing a job within six months.
- If you don’t secure a job despite fulfilling the requirements of the job search program, you may reach out to General Assembly’s ISA provider to formally fill out a deferment form. You’re eligible for payment deferment until you earn at least $3,333.34/month (equivalent to $40,000/year). While you’re in deferment, your ISA payments are paused.
- What if, after the grace period, you land a job that pays $3,333.34 per month or more? Then, your ISA payment begins. Every month, you pay 10 percent of your gross income. This means that if you’re earning $40,000 annually, then you’ll be paying $333.34 per month or $4,000 per year.
- There are two ways to fulfill your General Assembly ISA—whichever comes first.
- If you make the maximum number of monthly payments
- If your payments reach the payment cap
Note that if your payment window closes before you fulfill either of the obligations above, your ISA expires, as long as you’ve remained in compliance with your contract.
Facing the Music: Daniel Becomes a Software Engineer
“When I started at the bootcamp, I didn’t know anything. Everything was so difficult. I was just at the bottom. I had a lot of thoughts those times. ‘Is this for me? Am I really cut out for this? Should I just give up?’” Daniel said. “But I just held on. Come the seventh week, I was no longer drowning; I was flying. I just understood everything.”
By the end of the program, Daniel had created a project that even ranked among Career Karma’s Best Projects of the Week. Perhaps inspired by the health crisis that spurred Daniel to break into tech, the “RXGuide” is a front-end React application designed to help users organize their medication.
Using the RXGuide, users can choose a specific medication from a list provided and input the time that the specific prescription drug was taken. The app especially helps individuals who have trouble adhering to a schedule to keep track of their prescription drug intake.
Just a month after graduating from the Software Engineering Immersive, Daniel landed a contractual job as a front-end developer at Nuggie.menu, a Michigan-based startup that provides seed-to-sale software solutions to cannabis businesses and helps them stay ahead of changing compliance requirements in the state.
“I pretty much do 90 percent of the front-end development right now, and even if I’m on a contract basis, I actually get my 40 hours per week just like a full-time role. It’s pretty fun actually. I enjoy seeing my creations come to life,” said Daniel.
When asked where he hopes to progress in the industry, he said: “In the future, I’d like to be a teacher assistant or an instructor at General Assembly. But right now, I have a contract and you know that expires. There’s always a chance that the company will want to scale and extend my contract, but until I’m sure, I have to be responsible and keep applying.”
“I don’t mind,” said Daniel. “I love software engineering. At first, I was really scared. But as I did more of it, it felt more natural to me. Eventually, I just fell in love with it. And I’m definitely more secure now being in tech. I’m glad I chose General Assembly.”
Without an ISA, would Daniel have gone to General Assembly?
“Oh, no. Coding bootcamps are expensive. If there was no option for an ISA, I would’ve just tried learning on my own,” Daniel laughed. “I’m really glad there was.”
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