Coding-Boot-Camp graduates share their experiences with ISAs
- âPay after hire,â or the revenue sharing agreement, was popularized by the Lambda school.
- Students agree to pay a portion of their annual income instead of paying tuition fees up front.
- Insider spoke to three graduates about what they wished they had known about ISAs before enrolling.
Ryan Black was an actor who worked in the New York hotel industry for over seven years. Then the pandemic struck and forced him to reconsider what he wanted to do with his career.
He started looking for tech jobs, and friends pitched an idea: enroll in a coding boot camp with a revenue sharing deal so he only pays when hired.
This approach was popularized by the Lambda school. Revenue Sharing Agreements, or ISAs, allow people to enroll without paying tuition fees up front. Instead, students agree that after they graduate and get a job, they will pay a portion of their income for a number of years. ISAs were presented as a solution to the American student debt crisis, but they had issues and are not federally regulated.
Insider spoke to three coding boot camp graduates who used ISAs. Here’s what they would like to know before signing up.
Black graduated from App Academy in January and landed his first full-time engineering job six months later. While he thinks the revenue sharing deal was a “good investment” for his future, looking back he was surprised at the real cost of the ISA.
App Academy costs $ 17,000 up front. With an ISA, graduates pay 15% of their annual salary before taxes, with a cap of $ 28,000. Black now works for marketing startup Quikly as a full-stack developer, and about 25% of his monthly spend is his ISA payments. This is Black’s second biggest monthly cost after rent.
âWhen you first sign up it doesn’t seem like 15% of your paycheck would be a lot, but when you budget for it it definitely takes a huge hit,â he said. “I would have liked to focus on what my after-school life would be like and maybe consider other programs that offer slightly cheaper tuition.”
Reed MacDonald graduated from Coding Boot Camp General Assembly in 2019 and is halfway through paying his ISA. The deal takes at least 10% of a graduate’s pre-tax annual salary, up to $ 20,000. MacDonald is now working full time as a front end developer. He said the General Assembly had a very supportive career coaching program, but did not recommend ISA.
âI thought our incentives would be aligned; however, the salary cap starts at $ 40,000. So as long as you get a job over $ 40,000, you would pay them at 10%,â MacDonald told Insider. “So they were going to get this money from me anyway, whether I got a job in programming or not.”
Adam Moftah paid the App Academy ISA in eight months and now works for the training camp career coaching department. He said the deal was a critical part of launching his career.
âI know it’s a high rate, and while it might not work for everyone, I wasn’t one of those who initially $ 17,000 worked for,â Moftah told Insider. “What revenue sharing agreements are supposed to do in general is increase accessibility, and that specifically allowed me to change my career path.”
Ultimately, industry expert Liz Eggleston advises caution and extensive research when it comes to ISAs.
“While there is a little more uniformity in the ISA worlds right now, each school has different requirements regarding the percentage of each paycheck it charges its graduates, as well as different minimum wages.” , said Eggleston.