How to Compare Coding Bootcamp Income Share Agreements

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By Kasia Kovacs

Published on May 14, 2021

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Over the past decade, coding bootcamps have risen in prominence as an alternative to traditional computer science collee degree programs. Bootcamps teach students in-demand skills like programming and software engineering. Many of these programs also focus on helping students find employment after graduation. Since bootcamps typically require less time than a college program, an increasing number of young adults and job switchers have turned to bootcamps to jump-start their careers.

One of the main draws of coding bootcamps for a lot of students is the price. With the average cost of college tuition on the rise, bootcamps may represent a less expensive option. Still, bootcamps often ask for hefty payment —frequently over $10,000 —and they do not offer scholarships or other financial aid to the extent that traditional higher education institutions do.

One of the main draws of coding bootcamps for a lot of students is the price.

Bootcamps have largely leaned on alternative financing options to make themselves an attractive option to potential students. For example, income share agreements (ISAs) often allow students to bypass paying any tuition upfront. Instead, graduates pay a set percentage of their income after they complete the bootcamp and find a job.

While this might sound like an appealing option, not all ISAs are created equal. In fact, the majority of ISA programs require students to ultimately pay a considerable amount more than the upfront tuition price. It's critical that prospective students understand ISA terms before they sign on the dotted line. With that in mind, this guide breaks down exactly what you need to investigate when considering signing up for an ISA.

What Are ISAs?

Income share agreements allow students to start a bootcamp with no or very little money down. Once the student graduates from the bootcamp and finds a tech job, they then pay the bootcamp a fixed percentage of their monthly income (usually 10-15%) for a set amount of time (typically 2-4 years).

This may sound tempting to individuals who are not able to pay tuition in full upfront or in installments over the course of the bootcamp. But these programs can be risky, and students who take out ISAs often pay 1.5-2 times more than the upfront tuition cost.

Bootcamps also tend to have additional requirements regarding who qualifies to participate in an ISA. Students might need to possess U.S. citizenship, live in certain states or cities, or be a certain age. ISAs often enforce a set of rules related to how participants should search for jobs and stipulate conditions regarding the types of jobs participants can accept.

Pros and Cons of ISAs

Pros

  • No (or small) upfront costs: Perhaps the most obvious advantage to ISAs is that they lower the financial barrier to entry for bootcamps. Individuals without thousands of dollars saved up can enroll in bootcamps with a deposit of just $1,000 — or, in many cases, no deposit at all.
  • Money-back guarantee: Some bootcamps offer a money-back guarantee. If students do not find a job in the programming industry within a certain time period after graduation, they may not need to pay any tuition at all. Keep in mind, though, students usually need to sign an agreement with certain job search requirements to qualify for this option.

Cons

  • Cost: The total cost of an ISA typically exceeds the cost of paying tuition upfront, and sometimes the markup can be substantial. It's true that many bootcamps impose a cap on how much graduates have to pay overall through an ISA, but that cap is often much more than the sticker price. For instance, the bootcamp App Academy advertises programs with a tuition rate of $17,000, but the bootcamp sets its ISA cap at $31,000.
  • No federal regulation: Unlike many traditional financing options, such as loans, bootcamp ISA programs are not federally regulated. That means each state sets its own regulations, and you may be unprotected if you live in a state that does not regulate this practice.
  • Lower income: Since ISAs can eat up a considerable percentage of your income, you won't earn money to your full potential until you have reached your payment cap or the end of your repayment term. This can become particularly burdensome in areas with high costs of living, like New York City or San Francisco.
  • Job search requirements: Sometimes ISA agreements require students to meet certain criteria during their job search. These agreements could determine the types of jobs for which you apply, how many jobs you need to apply for, how much time you need to spend looking for jobs, and which job offers you're allowed to accept or reject.
  • Withdrawal from the program: If something prevents you from finishing your bootcamp, you may still have to pay a portion of your tuition, your full tuition, or an amount even higher than the upfront tuition depending on your agreement. Read the fine print carefully when it comes to leaving a bootcamp before graduating.

How to Evaluate ISAs

When determining whether you want to participate in an ISA program, make sure you thoroughly understand and evaluate what the ISA will mean for you. Here are some common factors to look out for:

Monthly income percentage: This refers to how much of your monthly earnings will be dedicated to bootcamp tuition repayment. For example, if you earn $3,000 per month with a 15% monthly income repayment percentage, you will pay $450 every month. Initial deposit: The amount you pay upfront when starting the bootcamp. Income threshold: The minimum annual salary that you need to make before you need to start repayment. Term limit: The number of months over which you must make repayments. Repayment cap: The maximum amount that you are required to pay. Once you meet the cap, you can stop making repayments, even if you haven't yet completed your term limit.

Make sure you know whether a bootcamp offers a money-back guarantee, and what happens if you can't find a job or drop out of the program. If a bootcamp doesn't list this information online, reach out to an admissions representative and ask them yourself.

Comparing Bootcamp ISAs

To gain some insight into how ISAs work in the real world, it can be useful to compare and contrast various deals from different bootcamps. The options provided by the five bootcamps listed below show how much ISAs can vary. Some require graduates to dedicate as little as 9.5% of their salaries to repayment, while others require 17%. Some require graduates to pay for four years, while others require less than two years of monthly payments.

While the examples below provide a small snapshot of how ISAs work, you can read more about how they're regulated, and how ISA's differ from deferred tuition plans here. You can also take a look at sample ISA agreements provided by Coding Dojo and Lambda School.

App Academy
  • Programs Starting At: $17,000
  • Payment Options: ISA, Upfront

The ISA at App Academy does not include an initial deposit; graduates only need to begin paying their tuition when they find a job with a minimum yearly salary of $50,000. Participants pay 15% of their income for 36 months, or until they pay $31,000 — whichever comes first. Participants must search for jobs in accordance with the App Academy Job Search Agreement. They must also be at least 20 years old and a U.S. citizen to qualify for the program. About 3,000 students have participated in App Academy's ISA since 2013.

ISA Snapshot

  • Initial Deposit: $0
  • Term Limit: 36 months
  • Percentage of Monthly Income Owed: 15%
  • Income Threshold: $50,000
  • Repayment Cap: $31,000
  • Money-Back Guarantee: Yes

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Coding Dojo
  • Programs Starting At: $7,745
  • Payment Options: Installments, ISA, Loans, Upfront, Scholarships

Coding Dojo requires students to put down a $1,000 deposit. They pay the remainder of their tuition in 20-48 monthly installments, and those payments may be 9.5%-9.8% of their income. The specific numbers depend on the tuition of a student's chosen bootcamp. Because the terms are not set in stone, interested individuals should calculate the terms of their ISA with the bootcamp's ISA repayment calculator. California residents do not qualify for this ISA program.

ISA Snapshot

  • Initial Deposit: $1,000
  • Term Limit: 20-48 months, depending on tuition size
  • Percentage of Monthly Income Owed: 9.5%-9.8%, depending on tuition size
  • Income Threshold: $32,000
  • Repayment Cap: Depends on tuition size
  • Money-Back Guarantee: No

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General Assembly
  • Programs Starting At: $14,950
  • Payment Options: Employee Sponsorship, GI Bill®, Installments, ISA, Loans, Scholarships, Upfront

General Assembly calls its ISA the "Catalyst Program." To participate, students make an initial $250 deposit and pay the remaining balance after they graduate and find a job paying $40,000 or more. Participants can end repayment early after paying 1.5 times what the upfront tuition would have been. That means for programs with a $14,950 price tag, ISA participants pay up to $22,425. Only full-time students may participate in the Catalyst Program.

ISA Snapshot

  • Initial Deposit: $250
  • Term Limit: 48 months
  • Percentage of Monthly Income Owed: 10%
  • Income Threshold: $40,000
  • Repayment Cap: 1.5 times the upfront tuition cost
  • Money-Back Guarantee: No

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Holberton School
  • Programs Starting At: $85,000
  • Payment Options: ISA, Upfront

The Holberton School offers a unique ISA program, in that students who choose the ISA program do not pay more than the $85,000 tuition; in some cases, they may pay less. That's because Holberton caps repayments at either $85,000 or 42 months of payment —whichever comes first. Graduates must pay 17% of their monthly salaries to participate in this ISA program.

ISA Snapshot

  • Initial Deposit: $0
  • Term Limit: 42 months
  • Percentage of Monthly Income Owed: 17%
  • Income Threshold: $40,000
  • Repayment Cap: $85,000
  • Money-Back Guarantee: No

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Galvanize
  • Programs Starting At: $17,980
  • Payment Options: ISA, Loans, Scholarships, Upfront

Galvanize (which now includes the popular bootcamp Hack Reactor) touts its ISA as the most "student-friendly" ISA in the industry due to its high minimum income threshold, its relatively low salary percentage, and its repayment cap. The agreement also lets you pause repayments if you stop making above the minimum threshold.

ISA Snapshot

  • Initial Deposit: $2,000
  • Term Limit: 48 months
  • Percentage of Monthly Income Owed: 10%
  • Income Threshold: $60,000
  • Repayment Cap: 1.4 times the upfront tuition cost
  • Money-Back Guarantee: No

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Frequently Asked Questions About Bootcamp ISAs

What's the difference between deferred tuition and ISAs?

Income share agreements require graduates to dedicate a fixed percentage of their income to tuition repayments. Deferred tuition plans work similarly, since students pay tuition only after they graduate. However, with deferred tuition, alumni pay a fixed dollar amount after they find a job, not a percentage of their salary. That repayment amount remains the same, regardless of a worker's salary. You can learn more about the differences between deferred tuition plans and ISAs with this resource.

Are ISAs better than loans?

Not necessarily, although the answer to this question depends on the specific terms and conditions of the loan and ISA you are comparing. Some bootcamps may tout ISAs as a favorable alternative to loans because ISAs don't come with interest rates. However, the total cost for an ISA is usually much greater than the upfront tuition cost, even without interest. If you're unsure about which option is best for you, do your research. Compare loan interest rates with ISA repayment caps, and consider the additional conditions that come with both financing options.

When do I have to pay back my bootcamp ISA tuition?

Generally speaking, bootcamp graduates must repay their ISA tuition after they have found a job. Not just any job counts, though; students must usually meet a certain income threshold, and the job may need to be in the student's field.

Additional Resources

How to Pay for a Coding Bootcamp Student Loan Options for Coding Bootcamps Coding Bootcamp Salary Potential

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