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Make School co-founder Jeremy Rossmann

Is this Silicon Valley college's pay-nothing-until-you-get-a-job tuition plan the future of education financing?


SAN FRANCISCO (CIRCA) — If you’re keeping a running list of the industries that Silicon Valley-style innovation has taken a stab at disrupting, you can now add higher education to it.

Make School, a new kind of accelerated computer science college in San Francisco, marries the real-life product work and deferred tuition schemes of coding boot camps with the pedagogy of traditional universities to provide a first-of-its-kind way for students to earn a full-fledged bachelor's degree.

“From term one, day one, they are taking technical courses ... within their first seven weeks; they are going to launch something. But also, we’re going to interweave, little by little, some of these nontechnical courses," Make School co-founder Jeremy Rossmann explained to Circa.

"And students would pay nothing until and unless they got a job."

Make School student screen

Make School launched out of a tech startup incubator six years ago and in 2014 began offering a technical school computer science program that, so far, boasts a roughly 80 percent success rate in immediately placing graduates in high-paying tech jobs.

“Students have gotten jobs at Google, at Apple, at Facebook," Rossmann said.

And keeping that same tuition model for its new bachelor’s degree students means a fresh approach to the $1.5 trillion debt problem that’s nagging the majority of higher-education students nationwide.

At Make School, students agree to a 20 percent Income Share Agreement tuition repayment over five years after graduation — but it only kicks in if and when a student lands a position that pays more than $60,000 per year. That’s compared to more than $160,000 worth of student loans that your average out-of-state student has to take out to pay for a four-year computer science bachelor's at a traditional university.

“The students that we're finding are much more nontraditional, typically lower-income and just as high-potential,” Rossmann said. "We're a college. We're a new college, we're a different college, we're an alternative college — but we're still a college."

Make School co-founder Jeremy Rossmann
Make School co-founder Jeremy Rossmann says right now, the college has no plans to expand beyond the scope of offering computer science degrees.

The Income Share Agreement approach to higher education payment isn’t a complete Silicon Valley innovation. Some traditional universities such as Purdue and Clarkson University offer students ISA funding to supplement traditional loans — and even at smaller rates of repayment than Make School’s program. But where Make School does go further than those programs is by offering an ISA payment option for a student’s entire BA tuition. And we should expect more schools to look into taking a similar approach with ISA in the future, said Andrew Pentis, a writer at Student Loan Hero.

"Some schools are going all in on ISAs. ... That's sort of a newer trend," Pentis said. "More commonly, in recent years, it's been third-party companies that are offering Income Share Agreements."

As for whether an ISA program, compared to the conundrum of traditional loans, makes more sense for students, Pentis said it should be looked at on a case-by-case basis.

"Current interest rates for direct loans are 5.05 percent. ... It could definitely be cheaper to borrow a federal student loan as opposed to an ISA," he said. "Being debt-free after five years is great, but you don't necessarily need an ISA to do it. You can pay off your federal or private loans within five years if you get really aggressive."

For Make School, which currently has just more than 100 students, Rossman believes the higher-than-federal-loan interest on its ISA makes good financial sense for its accelerated program students, who are, on average, quickly placed in starting salaries that average close to $100,000 per year.

"(Our two-year program is a) full bachelor’s that gets you in the industry a couple of years earlier than your peers and with average salaries that match top schools," he said. “You could imagine law schools working on this model. You could imagine nursing school working on this model.”


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