Thoughts on ISAs (income sharing agreements)

a year ago

The author reflects on their experience running a coding bootcamp from 2012-2018, emphasizing the challenges of aligning incentives, financing, and maintaining educational quality.
Running a school is fundamentally different from a software company, with headcount being the primary cost driver, making scalability difficult.
Hiring recent graduates as instructors was a pragmatic solution, balancing cost and educational effectiveness, despite public misconceptions about needing experienced practitioners.
Income Sharing Agreements (ISAs) were explored as an alternative to traditional tuition, offering benefits like outcome-based payments and access for underserved students, but led to higher dropout rates and financial losses.
The bootcamp shifted to Tuition Reimbursement models, requiring upfront payments to mitigate financial risks associated with ISAs.
ISAs may have potential in trade schools with stable career outcomes, but require transparency, payment caps, and rigorous alignment with job placement to avoid past pitfalls.
Key lessons include the importance of radical transparency, conservative payment caps, and avoiding rapid scaling without considering risks to student outcomes.

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