In May, Kay Chan graduated from General Assembly’s Software Engineering Immersive. Shortly after, she became a Junior Software Engineer for renowned business publication Forbes. Her speed to employment is especially impressive considering the pandemic-induced economic downturn that has mired the country. Although the crisis is far from over, Kay’s not particularly worried about paying the $14,950 tuition for her training.
Kay Relaunches Her Career
After a decade of being away from the computer, Kay Chan was determined to press play on a career that had been put on pause for years. In the early 2000s, she was a senior programmer and manager for a global investment company. There, she put her computer science education into practice, strictly dealing with online trading. However, Kay took parental leave four years into the job to care for her daughter.
Upon her return, Kay freelanced for local businesses as a software developer. The experience renewed her interest in the field, particularly in developing the client-facing aspect of websites. “I found that I enjoyed it,” she said. “Previously, when I worked full-time, I never did front-end. Most of my tasks were on back-end development.”
“So, it was a brand new experience for me and something that I wanted to do more of,” said Kay. However, much as she wanted to relaunch her career fully, she knew her skills and knowledge were “stale and outdated.” Her only logical option was to go back to school and reskill.
But as a career re-launcher, the thought of going through two years of further education wasn’t exactly an appealing option. After all, Kay had already spent four years in school when she completed a bachelor’s degree in computer science at New York University.
Then came General Assembly, one of the oldest and largest skills-based training providers in the United States.
The option was recommended by her friend, who had attended the bootcamp and successfully established a career in tech. So in February of this year, Kay enrolled in General Assembly’s Software Engineering Immersive. Much like traditional schooling, classes were held on campus (although, due to the pandemic, all classes are temporarily remote). The big difference, however, lies in the duration and method of teaching.
The class lasts for 12 weeks. Put another way, that’s only an eighth of the time it would’ve taken her to earn another degree. The bootcamp model also puts more emphasis on hands-on training. This way, learning goes beyond the textbook and the campus walls. This makes whatever skills students learn extremely transferable into the workplace.
But though bootcamps are indeed distinct from universities, they share one commonality. Neither comes cheap. While bootcamp costs are far lower than college tuition, paying up front for either is a privilege most students don’t have.
Enter income share agreement loans.
The gist is this: per an ISA, the student does not pay her tuition up front. Instead, the school fronts the fee in exchange for a specified fraction of her future earnings over a set period. The agreement falls under General Assembly’s Catalyst Program, which provides a “learn now, pay after you’re hired” policy.
“What caught my eye while reading about General Assembly was how it provided us with the option to defer paying tuition until we’re employed,” said Kay. “So it was attractive because that meant I had nothing to lose but time.”
“Of course, with how the ISA is structured, I’d end up paying more than if I paid upfront. But if you don’t have thousands of money sitting in your bank account now and you’re almost guaranteed a high-paying job afterward anyway, then it’s a win-win situation for all parties.”
The Terms and Conditions
General Assembly’s ISA loan terms are straightforward. Instead of paying tuition with cash or a traditional loan, students pay with a promise. The promise is this: once you’re earning, you will pay off your debt to the school with a share of your income for a set period. There are conditions and safeguards, however.
First, students only start paying off their debt once they hit the monthly minimum income threshold of $3,333.33 (equivalent to $40,000 annually). And even then, students have a three-month grace period before their payment obligation begins. Second, students will pay 10% of their income. So if you’re earning a gross income of $40,000 a year, you’d have to relinquish $4,000 out of your pay yearly or $333.33 a month.
What if we crank that down and say you’re earning $38,000 a year, which is below the threshold line? Then, your monthly payment goes down to $0. Rather than paying, you would fill out deferment forms to let General Assembly’s ISA provider know you’re earning less than $3,333.33 per month.
Third, for General Assembly’s ISA loan, the maximum number of required payments is 48 months or four years. So, while you’d be extremely lucky to pay off a traditional student loan in six years (which is how long most students with loans believe they’d be able to fulfill their obligations, contrary to the Department of Education’s estimated 20-year repayment window), you’re more than likely to pay tuition via an ISA loan in a much shorter time. If we do the math, someone earning $40,000 per year will pay $15,999.84 by the end of the contract.
Now, what if you’re making double the income threshold? Say you’re earning $80,000. This means you’ll be paying $666.67 per month. This is where the fourth safety net comes in. The ISA caps out at 1.5 the value of the initial funding. So no matter how high you’re earning above the line, your payment stops if you hit the cap. If tuition were $14,950, the payment cap would be $22,425. For an $80,000 earner, the obligation is fulfilled after 34 monthly payments.
These terms ensure that whatever the student pays is always proportionate to her earnings. The student is protected on all ends. Whether searching for a job, earning an entry-level salary, or making six figures, her payments will equal a fixed percentage of her income. And she’ll only pay when she meets the minimum income threshold.
“When I first heard about it, I thought the ISA was some sort of a scholarship and that it was only available for certain people. Later on, I discovered it was open for anybody,” said Kay. Anyone, including those with a less-than-stellar credit history, is eligible to apply for an ISA. Looking at the bigger picture, an ISA is also a welcome relief in times of volatility and uncertainty.
A Relief in the Time of a Pandemic
Kay became fluent in multiple programming languages, frameworks, and libraries during her training period. After being away from tech for years, Kay caught up with the numerous advancements in the field through General Assembly.
“I was gone for 10 years, so I wasn’t aware of many trends. I didn’t know how to use Slack or execute software projects through an Agile workflow,” said Kay. ”My training definitely helps now in my line of work because we use the same tools. There was no culture shock. I think I got that out of the way early because of General Assembly.”
For Kay, it helped that the bootcamp knew what the students and employers needed. “If I compare it with a university, General Assembly has a better structure. It was unlike colleges where the skills they teach are somewhat outdated.”
“GA knows the current market needs and tailors the curriculum against those demands. So the lessons just keep updating. Even the cohorts after me are already learning different topics than what I learned during my time there, which was only months ago,” said Kay.
Kay’s choice of schooling also proved efficient when the coronavirus spread globally. Two months into the program, General Assembly’s in-person bootcamps moved to remote live instruction due to COVID-19 shutdowns. “We were quite nervous because of the sudden move to remote learning, especially since some of us are used to in-person training,” she said.
The tumultuous economic climate didn’t help. “What was even more nerve-wracking was we knew it might be more difficult to get a job because of COVID-19. We knew that a lot of companies were on a hiring freeze. Some of my classmates even quit their jobs to finish the bootcamp.” But amid their concerns, paying tuition was not one of them.
“I knew that because of the ISA, I wouldn’t have to pay if I didn’t get a well-paying job. So that definitely helped ease my worries. Looking back, if it weren’t for the ISA, I would’ve thought twice about going to General Assembly,” said Kay.
As it turns out, her worries about securing a job post-graduation were unwarranted. Barely three months after getting certified, Kay landed a job at Forbes Media. “I’m currently a junior software engineer. I work in finance and do front-end coding projects for their website.”
“I don’t think I would’ve gotten to where I am now without GA. Actually, the reason that I got my current job is GA. Besides coding, GA prepares you for interviews and what to expect during job hunting. They have career coaches on site whom you meet regularly to equip you with strategies you’d need to stand out,” said Kay.
Kay’s ISA payments started three months into the job. And although no one wants money taken out of one’s paycheck every month, Kay doesn’t think the cost is burdensome. “GA laid out the numbers to us from Day 1. They explained how the ISA works and what we can expect to pay,” she said.
“The people I worked with in class came from different backgrounds. Some were in the restaurant business when they decided to make a career switch to tech. Others were in landscape design and many other industries. All of us knew the numbers and risks. But we thought we’d be happy to pay in the future if we got a job out of our training,” said Kay.
A Win-Win Situation
Due to the health crisis, Kay’s home has become her workplace. “I didn’t meet anybody personally. They sent me a laptop and all the necessary equipment, and then I started working. It is a bit of a struggle sometimes. We can’t even have the ‘pantry talk.’ But my team has been very supportive.”
“I hope to move on to a senior role eventually. Right now, I’m still learning the ropes and adjusting to changes in trends and tools. But sooner or later, I’d like to be able to contribute as a creator, as opposed to an observer or a listener,” she said.
For now, things are looking up. Months after relaunching her career, Kay somehow got both the things she wanted: family time and a full-time job in tech.
About us: Career Karma is a platform designed to help job seekers find, research, and connect with job training programs to advance their careers. Learn about the CK publication.