How to Pay for Coding Bootcamp: Financial Aid for Coding Bootcamps

Career Karma

Coding bootcamps are all the rage these days, and for good reason. They’re among the best ways to break into an exciting and fulfilling career in tech. However, many aspiring coders are concerned about the cost of coding bootcamps. While there is no form of FAFSA for coding bootcamps, you can pay for your education with loans for coding bootcamps. 

This comprehensive guide will give you all the information you need to make a smart decision about how to pay for coding bootcamp. We’ll teach you about the different financing options, including private loans, government funding, and personal funding. Keep reading to learn more.

What Are Coding Bootcamps?

The best coding bootcamps are short-term, immersive training programs that focus on helping people develop the skills they need to succeed in a specific tech career. Growth in the technology sector, in recent years, led to a spark in demand for workers with specialized skills in technology. Coding bootcamps emerged as a new type of institution to fill the gap in education training. 

Reasons to Go to a Coding Bootcamp

Coding bootcamps are particularly popular among those who are looking to transition into a new career in technology. Bootcamps are also popular among those who are looking to build new skills to help them unlock better jobs in the evolving workforce.

This is in large part because coding bootcamps are focused on helping students get hired after they graduate. This is a key benchmark bootcamps use for measuring their success. Many of the best coding bootcamps offer comprehensive career support to their students. Bootcamps also offer technical interview practice to help candidates prepare for the job search process.

Coding bootcamps have developed a new model of education focused on skills acquisition and employability. Bootcamps have also built a good reputation for investing in student success. This is contrary to colleges and universities, which often invest in non-academic resources such as more administrators and better amenities for students.

Differences Between Coding Bootcamps and Universities

The expectation for a coding bootcamp is different from that of a university. Prospective students at a coding bootcamp can expect to learn a variety of new skills in a short period of time. Upon graduating, they should be able to find a good job with those skills.

Bootcamps are not a replacement for universities for many reasons. Namely, these institutions are unaccredited and thus cannot award degrees. However, they are a great alternative to traditional education for people looking to pursue a career in technology.

College vs Coding Bootcamp Cost

Despite being significantly cheaper than a university degree program, paying for a coding bootcamp can be difficult. Many people think they can’t afford to go to a coding bootcamp. Luckily, bootcamps offer a wide variety of financing options for students.

Cost of Tuition for Traditional College

Tuition for a four-year institution cost an average of $28,123 in 2019, according to the Nation Center for Education Statistics. The average coding bootcamp typically charges about $13,600 for a program. These programs last an average of 14 weeks, according to an independent analysis.

Many coding bootcamps offer longer courses, as well. Bloom Institute of Technology, formerly Lambda School, has intensive, six to nine-month-long courses on data science, full stack development, and web development.

Coding Bootcamp Financing

Before you attend a coding bootcamp, it is important to understand all the financing options available. This will ensure you can give yourself the best possible chance to succeed. In this article, we will cover the main options available for prospective and current students at coding bootcamps. We will also cover the long-term ramifications of paying for a bootcamp with these options.

How to Pay for Coding Bootcamp

Before we go into more detail, let’s take an overview of how you can pay for coding bootcamp.

Government Programs to Pay for Coding Bootcamp

Unfortunately, there is no FAFSA for coding bootcamps. This means a Pell Grant or federal student loan are not available to coding bootcamp students. In 2016, the Office of Educational Technology announced the Educational Quality through Innovative Partnerships program, or EQUIP. 

EQUIP allows students to apply for federal financial aid including Pell Grants and federal loans. This would help students more easily afford non-traditional education, such as an online course or a coding bootcamp. However, there is currently only one approved university that partners with EQUIP. It is possible that this will change in the future. 

Coding bootcamps are not accredited, which is why most federal funding options do not apply to these educational institutions. The GI Bill and VET TEC are both options that military veterans and their families can take advantage of.

The GI Bill for Coding Bootcamp

The GI Bill was passed in 1944 after World War II. It was designed to help veterans reacclimate to civilian life. It gives them the capital they need for education, buying a home, or starting a business. In recent years, the money given to veterans for further education is now available to students who enroll in a short-term coding bootcamp. 

Under the Post-9/11 version of the bill, veterans may be eligible for up to 36 months of college or career training. Eligible students must have been discharged honorably, with a disability, or must still be on active duty. They also must serve or have served at least 36 months on active duty for the full suite of benefits. This includes money that can be spent on educational materials and living expenses.

Some of the benefits are offered if you have served for less time. Be sure to check out the full list of bootcamps eligible for GI Bill funds. Clearly, if you’re eligible, the GI Bill can answer a lot of your concerns about how to pay for coding bootcamp.

Coding Bootcamp Scholarships and Grants

There are also many coding bootcamp scholarships available, which are intended to expand access to their offerings. These bootcamp scholarships typically have a specific type of student they aim to fund. For example, some bootcamps offer discounts to some students after a new course has been launched.

Other programs offer bootcamp scholarships for women and underrepresented groups. Flatiron School, for example, has awarded over $1 million toward women’s coding education through its Women Take Tech scholarship fund. Some bootcamps have scholarship funds for veterans and military personnel.

Scholarships are a good option for students who are eligible as they do not need to be paid back. This means that students can attend a bootcamp and only be required to pay for the cost of equipment and resources.

Some bootcamp scholarships are partial, which means they discount a large part of tuition but not the whole cost. Others are full scholarships, which means they will cover the full amount of tuition for students. Bootcamps such as General Assembly, Flatiron School, and Hack Reactor offer scholarships to their students.

Deferred Tuition Programs for Coding Bootcamps

Recently, deferred tuition programs have started to gain traction in coding bootcamps. Through these options, students will only pay the tuition cost after graduation if a student does not graduate, they will pay a lower sum.

Deferred tuition allows students to pay their tuition after graduation, assuming they earn over a certain amount. Flatiron School, for example, partnered with the We Company to start the Access Labs program. This allows students to defer paying tuition until they have found a job paying over $35,000 per year.

Income Share Agreements

A more common form of deferred tuition is a coding bootcamp income share agreement (ISA). ISAs allow students to attend a coding bootcamp with no tuition paid upfront, in exchange for a percentage of their future income. Students only make payments as a percentage of their income once they graduate. They must earn over a certain amount typically between $30,000 and $60,000.

This means that if a student becomes unemployed or underemployed, they will not have to make payments toward their education. Further, ISAs include payment caps that ensure successful students do not pay disproportionately for their cost of education. ISAs are not a form of loan, but rather an alternative.

Income Share Agreements vs Traditional Loans

With an ISA, borrowers will only make payments when they earn over a certain amount. Traditional loans accrue interest and have a balance, which ISAs do not. ISA contracts are measured by the number of months a student has to make payments. In most cases, it reduces every month.

Advantages of Income Share Agreements

The main advantage of ISAs is that they provide a more flexible payment plan for students because they will only make payments if they succeed. ISAs also align the incentives of schools and their students, so schools have a strong motive to offer high-quality, up-to-date services that help students succeed. If a student does not succeed, they will pay back very little or nothing.

Bootcamps such as Flatiron School, General Assembly, and Kenzie Academy offer ISA-based financing models to their students. ISAs also expand access to coding bootcamps for those who are unable to access other options. If a student is ineligible for a private loan, they can pay for their bootcamp through an ISA. 

ISAs also focus on evaluating student potential rather than credit score when considering whether a student should be granted an ISA. This opens up access to this financing model to more students. However, ISAs have varying eligibility requirements, and so some students may not be able to access this financing option.

ISAs are not for every student. In an ISA, students may end up paying back more than they initially borrowed. This is because successful students will only stop making payments if their ISA term expires or if the payment cap is reached. This money is used to subsidize the losses from lower-earning students, which ensures that a school can continue to offer their educational services.

Paying with Coding Bootcamp Loans

Most coding bootcamps currently do not qualify for Title IV funding. This means that, at present, coding bootcamp students cannot access federal financial aid to pay for their education. In addition, Sallie Mae, a public company that offers student loans to college students, will not issue student loans to coding bootcamp students.

What Are Private Loans?

Private loans are a good option for coding bootcamp students. They allow you to access all the capital you need to finance your education. The money you borrow can also be used to cover costs related to bootcamps, such as technology or studying resources. This means students do not need to take out an additional loan.

Private loans are a type of loan, however, which means that interest will accrue over time. Private lenders usually charge between a five and eight percent Annual Percentage Rate (APR) on their loans. This is equal to the interest rate as well as extra fees on a loan for a whole year.

Paying for coding bootcamp with a private student loan means paying back your loans after graduation. You cannot make contributions toward your loan until you graduate, after which the payment period will start.

Finding Private Lenders to Pay for Coding Bootcamp

Most students rely on a private lender in order to pay for their coding bootcamp. Private lenders such as Affirm, Ascent Funding, Upstart, Earnest, and Climb Credit offer coding bootcamp loans. This makes it easier for students to afford their education.

Loans offered by private lenders usually have shorter terms. This is because most bootcamps are shorter than other educational options such as community college or university. Students who take out private loans can expect to pay back the money they borrowed in no more than five years. Most lenders expect students to pay back their loans between one and three years.

Interest-Only Loans from Private Bootcamp Lenders

In some instances, a lending partner may offer an interest-only loan for coding bootcamps. This is a special type of loan that allows students to make interest-only monthly payments while in school and for two months after. For example, Ascent Funding (formerly Skills Fund) and Bloc have partnered to allow students to pay interest while attending their bootcamp. 

However, private loans are not accessible to all students. Private lenders examine a borrower’s credit score, savings, and income-to-debt ratio. Students with a poor financial history may be denied access to a loan. Most private lenders do allow students to have a co-signer on their loan, someone who will pay back the money if the lender defaults.

Before you take out a loan to finance your education, you should check if the bootcamp has a partnership with any lenders. If you take out a loan with a bootcamp’s partnered lender, you are less likely to experience communication breakdowns. You are also more likely to receive a good experience with the lender. Below is a breakdown of a few top private lenders and their financing plans.

Employer Sponsorships and Crowdfunding to Pay for Coding Bootcamp

Some employers will also sponsor skills development courses for their workers. Through this model, you can ask your employer to pay for a portion of your bootcamp tuition or the full amount. The benefit of this to employers is that bootcamps help you become a more effective and productive employee. Ask your employer whether they would be willing to sponsor some or all of your tuition.

Companies that offer student-loan repayment benefits may also be willing to help workers by paying off their loans. Some companies cover the cost for you to go to a bootcamp. There is also the option of crowdfunding available to those who are otherwise unable to finance their bootcamp.

There are many online crowdfunding platforms such as Indiegogo and GoFundMe that allow people to raise money for causes including education. The benefit of crowdfunding is that it can be easy to raise the money you need. There is a wide audience to target who may be interested in helping you finance your education.

However, crowdfunding does have a few problems. The main one, however, is that you will be competing with other people who are raising money for similar causes. Therefore, you will need to craft a strong profile to maximize your chance of raising the money you need to attend a coding bootcamp.

Choosing How to Pay for Coding Bootcamp

Before you take the leap into coding bootcamp, here are a couple of key things you should consider.

Is a Coding Bootcamp Worth It for You?

Before enrolling, you should first ask yourself if the coding bootcamp is worth it. You should want to find schools that have independently-verified outcomes data. This means that an external body such as the Council on Integrity in Results Reporting has reviewed the outcomes data and verified its accuracy.

You should choose a bootcamp that both covers everything you need to know and also has high student outcomes. If you want to attend a top cyber security bootcamp, make sure its curriculum is up to date. If an institution has high student outcomes, attending the bootcamp is less risky because, on average, people will succeed.

You should assess the potential job possibilities you could access by attending a bootcamp. Find out about the expected salaries and pay increases of people in the career you are interested in pursuing earn. This will allow you to get a better sense of how much you can expect to make after graduation.

Such data will allow you to make a more informed decision about the method of financing you use for your education. The Bureau of Labor Statistics Occupational Outlook Handbook, for example, tells you about median pay and other requirements for positions in computer science.

Coding Bootcamp Cost

The average cost of coding bootcamp tuition is around $13,000. Eligible students can make use of deferred tuition and income share agreement-based models. There are various ways you can pay for a bootcamp, but before you make a decision you should ensure you know all the facts. Coding bootcamps offer a great way for people to accelerate their knowledge of various technical concepts.

Choose a method of financing that is both flexible and manageable, and works out based on how much you can expect to earn. If you invest some time upfront evaluating your financing options, you are more likely to get the most out of your coding bootcamp education. With so many payment options available, you’re sure to find a method that works for you.

How to Pay for Coding Bootcamp FAQ

With so many financing options available, you’re sure to find a method–or combination of methods–that works for you.

The post How to Pay for Coding Bootcamp: Financial Aid for Coding Bootcamps appeared first on Career Karma.

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James Gallagher

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