The $50,000 lower limit is there for people looking for work in more rural communities. For example, yesterday we had a student that was formerly a forklift driver making $10/hr get a job offer in the middle of nowhere for $78k (and that was only two days after graduation). He lives in an area where he pays $500/month for rent.
If he only went from making $10/hr to making $50k, the lifetime economic value is still indisputable - easily over a million dollars during his lifetime. Him paying us back for a couple of years in exchange for making that possible at no money down and shouldering the risk if it didn't work out is a fairly reasonable ask IMO.
That said, it is tough to do the actual life of a 2017 Bourgeois Professional with the income of a manual laborer (debt slave), even for a few years, because the theater of this requires a lot of energy, perfect physical health, and a great wardrobe to start, not to mention the attitudes and social mores that take a lifetime to learn. No one speaks of this crushing emotional toll that adds up to very real financial expenditures that help one deal with these theatrical maneuvers over time. It comes at great financial and psychological cost. People wonder why there is so much burnout in this field... I'm not claiming you should take this on. Not at all. It's just that it is never talked about. Some of these these "bootcamps" are desperate... some of these are in the top tier in SF and NYC. It seems that these issues should be raised at some point and discussed in a place like this one is all I'm saying.
1) New York laws have changed very recently to make it much, much harder to screw over freelancers and contractors -- the places where you'd otherwise see these companies sourcing labor.
2) Even competent developers take jobs for low pay. I see it happen all the time. I've even done it.
3) You could just be seeing signal that AngelList has a lot of mindshare now and poorly funded NY startups are listing there. I've seen people I know with vanity businesses hiring part time devs on that site for $29k.
4) Salary caps are still climbing here.
And who can afford to have $15,000 taken off the top
of their salary between $51,000 and $100,000?
[1] https://en.wikipedia.org/wiki/Personal_income_in_the_United_...
The original document is called an income share agreement (ISA). It's not a debt instrument or a loan, but is actually a legally binding "equity" stake in a student's future income under specific circumstances for a specific amount of time. Lambda, for example, takes a percentage of income for two years, only if they're working in a software-related field, and only if they're making above $50k/yr. We also cap the amount paid over the two years at $30k, regardless of how much a student is making. So, yes, if they don't get a good job, we never get paid. That only seems fair.
As for how it works practically:
In conjunction with the ISA, each student signs a 4506-T or 4506T-EZ (or any successor form) with the IRS, which effectively copies us on their taxes.
Students self-report their salary, and we adjust payments according to their reports, until year-end reconciliation, which happens around tax time. We get their taxes and double check that their self-reporting has been accurate, and adjust accordingly.
Should a student default, we have the same remedies that any other private lender would - we reserve the right to report to credit bureaus, we can sell the agreements to collections, etc.
-How do you track students once program completes?
We are working with http://vemo.com/, they are specialized in Income Share Agreements (ISA) and the goto in the industry if you want to do ISA. Purdue University is also using them. Vemo request access to students tax return so that we can see their income.
- How does the legal binding works?
Students are supposed to let us know about their employment situation so that we can adjust the payment. The deal is that they pay 17% of their income if they make $50k/year or more. At the end of the year tax time, we do a reconciliation where we compare the amount received against the student income, where the student or the school might owe money to the other part.
What is great about this model is that: -Student only contributes back to the school if they are employed. -Student contribution is proportional to their "financial success". -Holberton can only thrive if its graduates thrive, no bs.
The program is also quite different from regular education, we have no formal teachers, no lectures, students learn by working on projects and by collaborating with their classmates. Check us out https://www.holbertonschool.com/
It's indeed a "business opportunity" but I also believe that this the tuition model that post-secondary education should adopt if we consider that its main role is to train students to get a job after graduation. The success of schools should be proportional to students success.