We launched our online CS academy with no upfront tuition almost two years ago.
Now with thousands of students enrolled and hundreds already employed and paying back we wanted to take the next step and open up access to folks who couldn’t afford to pay to survive while attending.
Of course, that introduces significant risk on our part, as students still only pay us back if they get a job paying $50k/yr or more, but we’ve spent the last two years perfecting our admissions and course to select hard-working folks who are likely to have what it takes to get hired and do everything we can to get them there.
For context, we have dozens of full-time interview sourcers and multiple companies per day coming in to interview our students - incentive alignment is powerful. Now that that’s working we can afford to take more risk.
We’re hoping we reach a point where anyone anywhere can move quickly to a high paying job, and only pay back if it works!
As a cyber security engineer I think that this is something that would really help get more people into the industry. And there just isnt enough universities that have programs. My Alma Mater is going to be starting one soon but... Looking at the class list I cant help but feel like the 4 years are wasted and a more concentrated program would yield better results.
It seems like risk would only become a factor for Lambda School if you're taking 10% of pre-tax income from graduates for the 5 chronological years immediately after they graduate (regardless of employment status).
If you're instead taking 10% of pre-tax income from graduates for the next 5 years in which they're working (non-chronological), then the risk on your side actually seems fairly low, since most software jobs in the US pay >50k a year.
If you're taking 10% of pre-tax income from folks for the next 5 years in which they're employed AND making >50k, then the risk for Lambda School is basically zero. I believe this scenario is what is actually happening.
If the final scenario I laid out is what is happening, then this seems very close to traditional debt (take a loan out for living expenses + tuition, then repay a much larger amount down the line).
We only get paid if a student is making $50k/yr or more and the agreement is time-bound (10 yrs).
A student may teach those levels of salary without our involvement, but when our possible downside is $18k + the cost of training and our potential upside is somewhere between $0 and $50k any level of default or non-hiring destroys returns immediately.
I'm assuming that if someone loses a job, and later regains one, then payments pause while they're unemployed, but don't count for "repayment time", due to an article I read -- https://www.nytimes.com/2019/01/08/business/dealbook/educati....
How I think it works is that once someone graduates, they have 5 years of "repayment time debt". Once they get a job that pays >50k, the "repayment time debt" starts ticking down. If they lose their job, or start making <50k, then their "repayment time debt" stops ticking down, and will resume when they next get a job.
Even with a 10-year cap, this seems very close to traditional debt. It seems likely that software engineers will make more than 50k for 5 out of 10 years.
You’re assuming that everyone will quickly start making over $50k, which isn’t the case. Given that we outlay ~$30k in stipends and training and the cost of that capital is non trivial there’s no way a loan term would come close to this.
7.6% interest for 5 years on a $30k loan is $43,269.57.
However that is:
- a government loan where default rates don't directly drive the interest rates
- effectively subsidized by the govt
In your situation you must have much higher costs of capital from capital markets than the government's t-bill rates of 2.5% . Especially given that your product is effectively equivalent to a unsecured loan in the eyes of wall street.
Then compound that some percentage of students don't make the $50k income requirement in the first year or two after the program and others who are even further delayed. We can equate this to a traditional default rate except the are no negative consequences to your student for delaying (in comparison to traditional default which hurts their credit), all the while your cost of that original capital keeps growing.
Given that your upper bound repayment is 50k and most students won't make more then $100k their first couple years out, then that is an effective interest rate of 11% if the 50k is paid over 5 years.
All in, you guys have a tricky problem. That is unless you can get as good as Sofi at picking which people to finance, i.e. Those that will immediately many >100k and with a quicky increasing salary. But Sofi has it easier bc they just cherrypick all the Stanford MBA grads who already have high paying jobs and first refinance their Debt. You on the other hand have to forecast accurately who will be successful.
Total capital cost isn't that much though. 1k students at $30k is $30M. You can easily raise VC to cover that (actually already raised $48m ) and don't need traditional capital markets / wall street to prove the idea. Only when you begin to have 20k+ students would you need traditional debt facilities. Thus, isn't your cost of capital just giving the VC ownership in the company instead of a repayment cost of capital (for now at least)?
I wonder what you make of the argument that most of what colleges/boot camps/etc are providing is largely just signaling, rather than education?
Obviously there is some education component, but I'm wondering how you think about the nature of the value you are providing.
I'm curious, one of your student stories mentions a student who was immediately hired into a senior engineering role upon graduating. While I've heard great things about Lambda School and its students, that gives me pause. When companies hire new grads directly into senior roles, do you think that they're set up to succeed in those roles? I'm genuinely curious.
For instance the place I work just hired as a senior engineer a former math professor with a math PhD that hasn't written a line of production code in their life. If this person decided to go through a 9 month bootcamp before applying the outcome would have been the same.
Note this is not a comment about the quality of Lambda School. I've heard good things about it. But it's almost tautological that someone shouldn't be eligible for a "senior software engineer" title after they've graduated Lambda School, just as they shouldn't be eligible for it after they've graduated university. Such training is necessary but insufficient for being able to meet the level of responsibility you're given at that title.
Like I said, this isn't a comment on the Lambda School. It's a comment on the idea that this occurrence isn't absurd, regardless of whether or not it's rare.
Senior Engineer is a relative title. It means more senior than the other engineers at that firm not other engineers at different firms. A senior engineer on the google android team is way more knowledgeable than the senior architect at a local coding shop where the average dev makes 40k/year and has a year of experience.
The "Senior" hires may have significant outside industry experience, even if they only have 9 months of programming experience.
The title is a paygrade in this case, not a level of experience.
You can imagine how well this went over.
As someone a bit later in their career (4 years in), I'm a bit jealous of this opportunity. I'd be very curious in some kind of midlevel->senior program like this. Something like Bradfield but more widely available geographically. The content is more difficult at that level, but the salaries are substantially higher as well.
What about international students ? Can a Canadian apply to Lambda School ?
But hopefully soon.
The biggest problem in education right now, IMO, is that incentives are not aligned. What happens with college is that students put themselves 100K+ in debt, but the college doesn't really care if the people get jobs in not.
It is an extremely upstanding and honest business model, to make is so the educational institution (you, in this case), only get paid if the students get paid.
I really hope that more educational institutions follow your example of taking on the risk of the students.
- current Lambda Student
We train students on that stuff but they’d really struggle in the long run if that were too much of a focus.
Our first cohort, for example, hit 100% employment.
In major tech cities (NYC, Seattle, Silicon Valley) the starting salaries are over $100,000, plus $20-40,000 in Restricted Stock Units, and $20-40,000 in yearly bonus.
Importantly, RSUs from public companies are directly convertible to cash once they vest (usually 12 months). Startup options lottery tickets are a different story.
I don't think people not looking for a job is a problem you need to heavily consider. Especially if there's a selection process for admission -- which the founder says there is.
Edit: I my case, I'd find an extra 2k/month attractive, and there are always new things to learn about software.
We're single digit months away.
Today, atleast in US it requires taking significant debt/risk to become a developer which keeps away the people who are risk averse.
I seriously suggest stopping this program otherwis there will be massive supply of developers resulting in huge wage drop.
Lambda School is quite possibly the most impressive startup I'm presently aware of. They are going to hit tertiary education like a freight train.
For the US, something like Lambda school seems to be a great alternative. For Europeans, it’s way too expensive at $30k max.
Maybe consider studying in Europe. Good universities, no mandatory meal plans or dorms, no tuition, comparatively low cost of living, great education. Language could be a barrier, but there are international universities afaik.
Edit: This isn’t to downplay Lambda School. I think it’s great to have alternatives to US universities. It’s just to give some perspective what education looks like in other countries and that the US university system is kind of insane.
You should tell that to our rapidly growing number of German and European students :)
Maybe an explanation is: CS students usually don't get entry-level jobs that pay more than 50K EUR, often probably less. So maybe they hope that they never have to pay back. Or they don't care and are happy to have a good education after all.
I'm happy for you and the growth and maybe I missed something :)
- 0 up-front + 10% of salary for four years (£25k GBP / €27.5k EUR maximum total payment)
- £16k GBP or €18k EUR up-front + no income-based repayment
£25k GBP / €27.5k EUR maximum
The five year payment window clock starts on graduation. So if you don’t get a qualifying job within 5 years of finishing class, you pay nothing.
EDIT: Not sure if you were referring to US or EU, since you mixed around the $ and € sign a little!
I love that programs like Udacity (and likely Lambda School as well) teaches Git(hub) as a 101 level course and use traditional workflows to submit, critique, and grade code.
I do, however, still think traditional universities still have a place, especially when it comes to research. I’m referring to things like AI/ML.
I can’t think of a single skill more stupid to learn in university.
My degree came a lot cheaper than the modern ones but if I got a similar experience now as then I wouldn’t feel cheated.
My undergraduate provided opportunities to program lisps & assembly & write published articles on data structures & I literally went to the local state school.
"Right! If there is one thing I know how to do, it's sorting", I though.
Finished the job in half a day (shell sort -- which sadly was the only one I could actually remember...) They thought I was a freaking genius :-) Who says you'll never use this stuff?
How many times have you told it? :)
The idea that universities should only teach theory is preposterous. While Bolonia or Harvard or Oxford might not have been founded on the idea of helping students find jobs, that’s an implicit - and legitimate - expectation since the mid 20th century.
It’d be criminal for unis to drop out students into the real world without any knowldge of git. Hell, it’s also widely used in academia, so if you teach students “research techniques”, you might as well teach them git.
I’ve used at least 8 source control systems in my career. Knowing them have not been long term beneficial. Especially in comparison to the other things I did learn.
Colleges would argue turning you into a software engineer isn't their role, which is fine, but I'd argue that is the goal of the vast majority of CS students, so there's a mismatch.
I can (for an aspiring software engineer) - real analysis, differential equations, number theory
And yeah linear algebra is definitely something I wish I got more out of. In college I did enough to get a good grade but not nearly enough to grok it. I'm hoping to take fast.ais course on it some day to rectify that mistake.
When I was in school I'm glad I went out of my way to take all the math-heavy and theoretical classes I could, and no classes like "modern web design" or "software engineering project". Learning basic programming is trivial and something I literally get paid to do (so long as I learn at a decent rate) while all the knowledge I have about math and theory is a lot harder to learn outside of an academic setting and is a force multiplier on most things I do for work.
You are thinking about this wrong.
If it is so easy and quick to teach people how to use git, then why aren't colleges doing it!?!?
Learning how to use common software engineer tools is a low effort, high reward situation. All they have to do is spend a day on it, and they have now made their students significantly more valuable.
Educational institutions that do not even bother to spend such a small amount of time, in order to make their students much more valuable, are making a huge mistake.
I can confirm that there are theory-focused professors at a particular state university that don't understand version control or have any experience with it. It's not that they don't see any value in it, they just don't have any experience with it to pass on to students.
Some of them actually do.
I've been enrolled for about 6 months. I've had previous programming experience so I feel I've had a leg up. But had no idea how to use the skills or build anything. I've never felt this confident with what I've learned in my life. Period. Everyone I've interacted with is genuine, welcoming, and gives me the impression they want me to succeed. I'm truly grateful to be able to be enrolled and I look forward to working to be able to pay back the school the value they've imparted in me.
Thank you Austen and everyone from Lambda School!
I can’t go into all the details publicly, but it’s something we have to take serious consideration to prepare for.
What happens when regulators start cracking down on these practices and what makes you think Lambda will be successful when most bootcamps have failed or been acquired.
What makes Lambda School different than other code schools is a few things:
1. Our incentives are entirely aligned with the student. We don’t get paid unless they get hired so juicing revenue numbers with weak students just isn’t interesting, in fact it’s fatal.
2. We put an insane amount of time, money, effort and energy into instructional design. Lambda School is nine months long, and includes a computer science curriculum most bootcamp grads need (and lack).
Regulators love us - they’re sick of for profit schools promising a lot and delivering little except debt. We’re the antidote to that. That’s why there’s so much hype.
What do you think regulators need to address at Lambda School?
If you’d like you can attend classes on a trial basis and check it out!
How big of a problem is that for your student-to-job conversion rate when the criteria has to become less stringent to scale?
We’re seeing over 1,000 applications/week. Top of funnel is not our issue.
First part: Makes perfect sense
Second part: How do you assess this beyond prior school/work history or how quickly they finish the prep course? I could see it being much more difficult to assess with older students/parents/people who struggled in school etc.
Third part: As a non-programmer, any examples of one of these steep curves?
I wasn't meaning to imply the demand isn't there, was just trying to picture LS at scale in 3-5 years (say 25k-100K students a year).
Do you think that 75%+ placement is possible at scale -- I'd assume abandonment/failing students etc would increase greatly similar to other "open enrollment" coding bootcamps.
Regardless, it clearly is a +EV decision for any student who is able to get in. Congrats on creating a great product.
We helped a 45-year-old get hired recently!
But really it's just that things take time. Two years ago we didn't exist. Now we have over 1,000 concurrent students, 60+ full-time employees, and 120+ contract technical mentors. And mostly we think about product and how to make everything better as quickly as we can.
We want to continue improving everything as we 10x the number of students and open up opportunities to more people, all while improving our outcomes (https://lambdaschool.com/outcomes). It's just hard to do.
Right now they can cherry pick the most promising. And learning something is different than doing it as a career. I personally know 2 bootcamp (not Lambda) grads who subsequently left software altogether since it wasn’t as much fun as they thought. Learning new stuff in a fun, hip, environment is great! Debugging some 5 year old production code while the customer is howling on Christmas Eve...not so much.
Overall though I’m a fan of non-traditional education so I think there is a place for this. I am also an employer and am in favor of increasing talent supply and reducing wage pressures.
The major universities in my city all advertise in really over-the-top, emotive, glowing language.
Luck of the draw with who decides to interview you, I had a guy from the admissions team with zero enthusiasm essentially just reading off of a list of questions. I tried to answer well but giving off good energy from a dead duck is hard. I also was more practical with my answers of wanting to get into coding, jump in profession, curious, experience as a BA, writing technical docs and general data analysis. Each response by the interview was simply: "hmmm ok." Rejected around ten minutes after my TEN minute call. PS tell them you love coding, live and breathe it, etc.
> Upon completion of the program, students will pay 10% of their salary for a five year period once they're making at least $50,000 per year. The max possible payment is capped at $50,000.
If your point is “the $2,000 isn’t free” then yes you’re 100% correct.
I suspect the $2k could suffer from a free-rider problem from those who never intend to acquire such a job - especially in low cost of living areas with few jobs but unwilling or unable to relocate. Ideally it wouldn't make sense to do so.
Sam's answer: "You know, years ago I wrote a little program to look at this, like how quickly our best founders — the founders that run billion-plus companies — answer my emails versus our bad founders. I don’t remember the exact data, but it was mind-blowingly different. It was a difference of minutes versus days on average response times."
I did a "full time" 3 month long more "traditional" structured boot camp. I really wish it had been longer and that they.... filtered .... students as it went.
I think that's very much a thing. I do think that some folks ... just can't beyond that, but I agree lazy habits are the worst and frustrating.
I put in a TON of time outside class when I went to a bootcamp. I'd make progress and come back with a quick question for the instructor, and there would be a series of people with the same questions waiting to talk to the instructor who clearly did nothing since the last time they talked to the instructor and were asking the same question as the day before who are mildly perturbed the instructor doesn't just give them the answer...
A lot of the time I just gave up trying to talk to the instructor.
And just as bad they ate up a lot of my time on group projects. It's no fun working with people who aren't capable. I don't mean lesser skilled, there's always stuff for lesser skilled folks to do IMO. But if they can't do anything, not worth it.
Having said that, I was happy to help any fellow students when I was in class, but if it is clear they're not doing well / not getting the thing for the 8th time, I don't think it is worth anyone's time anymore, including the person not getting it.
I think there is a line between "slow" and "not gonna get it". I ran into a great deal of the "not gonna get it" and it burned a lot of my time / instructor time.
Also, to some extent "slow learner" and a bootcamp could be a mismatch from the start. I'm by no means "fast" but if i were slower the class maybe fundamentally wouldn't have been a good match for me. I did put in a lot of outside work to catch up at times, but that was on me.
It would be a lot easier to just tighten your admissions process.
In fact you might just want to ask for a raise to $55k and be net ahead because that’s not a great software engineering salary.
1. Do the payments begin if the new job is not in-field (not related to Software Engineering)?
2. Is there a grace period or deadline (depending on your point of view) before the payments begin? If so, how is the monthly payment amount calculated?
2. Is there a grace period in the event they stop working after the payments begin?
3. Do the ISA payments kick in if it's not a new job? In other words, if they continue working in a job that makes >=$50K/yr?
4. Are the requirements for participating in your ISA program similar to obtaining a loan? Good credit, no defaults, etc..
Sorry if I missed any of these answers in the announcement or terms. We have been offering an ISA program at our Houston and Atlanta based bootcamp for just over 6 months now and recently adjusted it based off feedback so that payments only kick in when the new job is in-field, includes a grace period, and must be a new job. However, we couldn't do much for the credit history requirements. An ISA is essentially a delayed loan and requires the same (if not stricter) credit history requirements. It's a good alternative to taking out a loan for some, but it's usually not a fallback if you can't get one.
Thanks Lambda team!
2. You pay nothing between when you finish the technical portion of the class and when you get a job, and after you start your job, there's a 30-day grace period.
2. The payments stop if you stop working. You can think of them as being 24 monthly repayments that will pause if you lose your job.
3. It does, but only after they finish the technical portion of the class, and they're using the skills they learned. We do look at things on a case-by-case basis.
4. Nope! We don't care about your credit score or your debt load. Things get tricky if you have a fraud conviction, but anything short of that won't impact our decision.
Hope this helps!
I would assume these types would be filtered out during the admissions process.
Just different models!
Email me the details and I’ll pass on to the admissions team. firstname.lastname@example.org.
Either way, good on you guys for trying to do something that helps people that are disadvantaged. You guys should start a charity arm that people can donate to so that more people can get the stipend!
1. No stipend, 17% for 2 yrs
2. Stipend, 10% for 5 yrs
They’re mutually exclusive.
And we do have a charity arm! https://lambdapaf.org
Didn't know about the charity -- that's great! Is it a 503(c)? The website doesn't seem to have too much info about where the donation goes.
The fund itself is a small nonprofit waiting on 501c3 approval.
> We offer part time courses for some of our tracks. Part-time course hours are Monday-Thursday 6 p.m. to 9 p.m., Saturday 9 a.m. to 12 noon Pacific.
Are these times also for EU students?
This is exactly what the world needs more of. I recommend this to anyone looking to switch careers.
What's the best way to determine if this is a fit for me?
Admittedly we're mostly built for folks trying to break into tech right now, but will be modularizing and offering different segments in the near future.
I’m self-taught, but I definitely have some gaps in the algorithm side of things.
And the EU and U.K. Other countries coming soon, Canada in ~two weeks.