Which Bootcamp Payment Option Is Best?

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by Bethanny Parker

Published on December 14, 2021 ยท Updated on December 15, 2021

Reviewed by Andrew Lauchengco

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You've decided to attend a bootcamp to launch your new tech career quickly. But even though bootcamps cost less than the average four-year college degree, they can still be quite expensive — the average bootcamp will set you back about $13,500.

Unless you have a hefty savings account balance, you may need to find an alternative way to pay for your bootcamp, other than simply paying your tuition upfront. This guide can help you understand three common ways to finance a bootcamp: income share agreements (ISAs), deferred tuition plans, and bootcamp loans. We'll discuss the pros and cons of each of these bootcamp payment options and help you decide which might be best for you.

What Are Income Share Agreements?

Income share agreements allow students to start their education at no cost or with a small upfront deposit. The student agrees to pay a percentage of their income for a predetermined amount of time after completing the bootcamp. Typically, graduates pay 10-20% of their income for 2-4 years under an ISA.

Some income share agreements are offered through a third-party ISA provider or servicer, such as Leif, but many are offered directly by the bootcamp. Bootcamp ISAs vary significantly depending on the bootcamp provider, but many now come with a repayment cap — such as 1.5 times the upfront tuition cost — to prevent graduates from paying a surprisingly high price for their bootcamp.

Most ISAs also come with a "minimum salary threshold," which often ranges from $40,000-$60,000. Graduates only start repaying their tuition once they find a job with a salary level higher than the minimum threshold.

Income share agreements can be confusing and potentially risky. Depending on your salary level, you may end up paying less for the bootcamp than other options — or considerably more. Make sure you read the fine print when exploring this option.

Pros and Cons of Income Share Agreements

Pros Start for free (or a small deposit): While some ISAs require students to pay a deposit of $1,000-$2,000 before starting their bootcamps, others allow them to start for free, with no deposit at all. Either way, ISAs reduce the size of the lump sum payment that students need to pay to start their bootcamp. Repayment cap: Many ISAs have a cap, or ceiling, on the amount a graduate must pay. For example, a common cap is 1.5 times the upfront tuition cost. Once students reach this cap, they can stop making payments, even if they haven't reached the end of their repayment term. Money-back guarantee: Some bootcamps offer a money-back guarantee. If a qualifying graduate does not find employment within a certain amount of time after they complete their bootcamp, they may qualify for a tuition refund. These guarantees often apply to students with an ISA.
Cons Cost: Students who sign an ISA may end up paying much more than the advertised price of the bootcamp. Even if the ISA has a repayment cap, it can often be 1.5 times the upfront cost of the bootcamp or higher. This may be more expensive in the long run than taking out a loan. Job search requirements: ISAs usually come with strict job search requirements. Graduates may need to apply to a certain number of jobs per week and attend a certain number of networking events, for example. Less money to live on: Since graduates with an ISA must pay a portion of their income each month to the ISA provider, they have less money for things like food, rent, and car payments. This can cause financial hardship, especially in areas with a high cost of living. Payment after program withdrawal: Students who withdraw from the program before finishing may find that they still owe some or all of the tuition under the ISA. Read the fine print before starting, and be sure that you are committed to finishing the program once you begin. No federal regulation: Since there are no federal regulations regarding ISAs and regulations vary from state to state, students should be sure to read the agreement carefully to protect themselves from predatory lending practices.

What Are Bootcamp Loans?

If you've been trying to figure out how to pay for a coding bootcamp, you've probably noticed that many bootcamps offer loans. Some bootcamps partner with private loan providers that offer loans specifically for bootcamp students, such as Climb Credit, Earnest, Skills Fund, and Upstart.

Since bootcamps aren't usually accredited, bootcamp students do not qualify for federal financial aid or federal student loans. Most student loans from private lenders also require students to enroll in an accredited degree program.

Bootcamp students can take out a personal loan to pay their bootcamp tuition, or they can apply for a loan specifically tailored for bootcamp students. These bootcamp loans may have a better interest rate than other personal loans, and they may come with more flexible repayment arrangements. (Although it's always worth comparing loan rates from multiple lenders, including private lenders who aren't focused on bootcamp loans.)

For instance, some loan providers offer bootcamp students the option to make interest-only payments until three months after they finish their bootcamp, or to defer payments completely until three months after graduation.

Most loans require a minimum credit score for qualification. Students with less than stellar credit may be able to qualify with the help of a co-signer. Some lenders also offer loans to help cover living expenses incurred while attending the bootcamp.

Learn more about bootcamp loan options  

Pros and Cons of Bootcamp Loans

Pros Easy to apply: Many bootcamp loan providers have a quick application process that only takes minutes. Students can quickly find out whether they qualify for financing. Deferred repayment: Some loan providers offer bootcamp students the option to make no payments or interest-only payments while they attend the bootcamp and for a short time after they graduate. Living expenses: Some loan providers allow students to borrow money to help finance their living expenses during a bootcamp. Pausing payment: Loans may allow you to stop making payments for a short period of time if you lose your job or run into financial hardship due to an unexpected expense, such as a large medical bill. Explore the loan's policies around "deferment" and "forbearance" when researching the loan terms.
Cons Relative Cost: Interest rates on bootcamp loans may be higher than traditional student loans available for other programs. Depending on the terms, taking out a loan may also be more expensive than other payment options, such as a deferred tuition plan or an ISA. High monthly payments: Depending on the amount of your monthly payment and how much money you are making at your job, a loan payment could cause financial hardship. Make sure you can afford the payment before taking out a loan. Payments may start right away: If your loan does not offer a deferred payment start date, you will have to start making payments immediately.

What Is Deferred Tuition?

Deferred tuition plans also allow students to start their bootcamps for free or with a small deposit and pay the rest of the tuition after completing the bootcamp and finding a job.

Unlike ISAs, graduates do not pay a percentage of their income with deferred tuition plans. Instead, they pay a fixed amount in installments over a set amount of time that is agreed upon before the bootcamp starts. The tuition amount for a deferred tuition plan is usually higher than the upfront cost of tuition, often 1.3-1.7 times higher.

Sometimes you may see a bootcamp call an income share agreement a "deferred tuition" agreement, but remember that the key difference is whether you pay a percentage of your income or a pre-set amount.

You may also see private loans with "deferred payment" options. It can be confusing to tell all of these options apart, but there are several key differences between a deferred tuition plan and a loan with a deferred payment start date.

A student making loan payments typically pays the upfront bootcamp tuition cost plus interest, while a deferred tuition plan offered directly by a bootcamp does not have interest but charges a higher tuition amount than the advertised upfront cost for the program.

With a loan, you may be able to lessen the overall cost by making higher monthly payments or additional payments, lowering the amount of interest that you pay. Alternatively, with a deferred tuition plan, the total cost is set from the beginning.

Deferred tuition plans also don't kick in until you find a job, whereas loans with a deferred payment start date require you to start paying at a certain time (such as three months after you graduate from the program), regardless of whether you have found a job by that date or not.

Learn which bootcamps offer deferred tuition  

Pros and Cons of Deferred Tuition

Pros Start for free (or a small deposit): Like ISAs, deferred tuition allows students to start for free or with a relatively small deposit. Set repayment amount: Unlike many ISAs, deferred tuition plans have a set repayment amount. With an ISA, if there is no repayment cap then you may end up paying much more than the upfront cost of the bootcamp if you secure a job with a high salary. With a deferred tuition plan, you are protected from that possibility. Money-back guarantee: As with ISAs, if the bootcamp provider has a money-back guarantee, this usually applies to students with deferred tuition plans. If qualifying graduates don't find a job within a certain amount of time, they may not need to repay any tuition.
Cons Cost: Deferred tuition plans cost more than paying for a bootcamp upfront, and they may also cost more than an ISA or taking out a loan. Make sure to investigate all options carefully and compare the total costs associated with each. Job search requirements: Deferred tuition plans typically come with strict job search requirements, such as requiring graduates to apply for a certain number of jobs per week. Budget crunch: Depending on how much you make following graduation and the cost of your monthly payments, you might find it difficult to fit the payment into your budget. Since the payment amount is fixed and does not depend on your salary the way an ISA payment does, you may face difficulties with repayment if you earn an entry-level salary and live in an area with a high cost of living. Payment after withdrawal: Check to see how much you'll need to pay if you don't complete the program — it may be higher than the amount you would pay if you were using other payment options.

Which Bootcamp Financing Option Is Best?

So which bootcamp financing option is best? It depends on your financial situation, the specific terms offered by a bootcamp, and your priorities — such as paying the cheapest overall cost, finding the lowest monthly payments, or following the most flexible repayment schedule.

In terms of overall cost, the least expensive option will almost always be to pay the full tuition upfront. If that's not possible for you, you might be a good fit for any of the three payment options discussed in this guide.

A loan may be right for you if you have good credit or a co-signer to help you qualify, depending on the conditions of the loan. Because you typically have the freedom to pay off a loan early, you may not be on the hook for as much money as you would in an income share agreement or deferred tuition plan — especially if you secure a job with a lucrative salary.

If you don't have the best credit, an ISA or deferred tuition plan may be your best option. However, with either choice, you'll need to be committed to finding a tech job immediately after completing the bootcamp.

A good way to pick the best financing option is to first explore potential bootcamps based on their curricula, student outcomes, and learning formats. Then, compare the specific costs, terms, and conditions of each bootcamp's payment options. You may discover that the overall price of one bootcamp's ISA is less than the deferred tuition plan of another, or vice versa. If finding the cheapest option is a priority, you'll need to do some research and get all the details to really know which is best.

Frequently Asked Questions About Bootcamp Payment Options

How much does a coding bootcamp cost?

According to data collected by BestColleges in 2020, the average cost for a full-time bootcamp was around $13,580, while the average cost for a part-time bootcamp was $12,265. Bootcamps range in price from a few thousand dollars to over $20,000.

How do you pay for a coding bootcamp?

Most bootcamps have alternative payment options for students who cannot afford to pay the full tuition upfront. These include income share agreements, deferred tuition plans, loans, scholarships, and installment plans. Some bootcamps also accept GI Bill® funding.

Does financial aid cover coding bootcamps?

Although federal student financial aid does not cover bootcamps, many bootcamps offer scholarships and loans to help students finance their education. Most bootcamp scholarships range from $500-$2,000, although some bootcamp providers offer larger scholarships.

Additional Resources

Free Coding Bootcamps Cheapest Coding Bootcamps Coding Bootcamp Scholarships

Editor's Note: This article contains general information and is not intended to be a substitute for professional advice. Please consult a professional advisor before making decisions about financial issues.

GI Bill® is a registered trademark of the U.S. Department of Veterans Affairs (VA). More information about education benefits offered by VA is available at the official U.S. government website at https://benefits.va.gov/gibill/index.asp.

BestColleges.com is an advertising-supported site. Featured or trusted partner programs and all school search, finder, or match results are for schools that compensate us. This compensation does not influence our school rankings, resource guides, or other editorially-independent information published on this site.

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