Financing A Coding School Education With Peer-to-Peer Loans

A coding bootcamp reviews site is helping students finance educations at these unaccredited schools.

Financing A Coding School Education With Peer-to-Peer Loans
[Image: Flickr user Justin Scott Campbell]

Though coding schools are proving to be big business, one of the major issues plaguing the landscape is the lack of financial support for students. Those accepted are unable to secure student loans from traditional financial institutions because these schools–which can charge five figures in tuition–are unaccredited, leaving them to seek corporate sponsorship or resort to creative means, such as the man who tried to crowdfund his tuition on Indiegogo.

Switch, which launched Sunday night as an online repository for reviews of coding bootcamps, is hoping to give students more options. The startup has partnered with peer-to-peer lending group Prosper and will receive a set undisclosed sum for each referral. This will be the first time Prosper, a marketplace that has facilitated $1 billion in financing, will issue loans for this alternative form of education. Switch is also in talks with LendLayer, an early-stage startup that plans to offer peer-to-peer loans specifically for coding school students, as well as larger banks.

“For big banks, they’re not interested in these small amounts,” founder of Switch Jonathan Lau told Fast Company. “Our pitch to them is if you can lend the smaller amount upfront, you can capture the lifetime value, and that’s worth way more. We don’t see this as a one-off loan. We see it as a way to get in touch with consumers early on in their career.”

Loans represent only one part of the business. The company’s course recommendation tools, including a quiz, aim to help prospective students wade through the growing list of hack school options. A recent study found coding school graduates boosted their salaries by an average of 44% after they finished their programs.

“The real motivation behind this site is to help clarify misleading things for the consumer with regards to the bootcamp industry and add more transparency via reviews,” Lau said. But Switch is also thinking of striking up partnerships with bootcamps as a potential revenue source. “We want to avoid a conflict of interest because we’re a review site. We’re very careful as to how we roll out affiliate programs,” he added.

About the author

Based in San Francisco, Alice Truong is Fast Company's West Coast correspondent. She previously reported in Chicago, Washington D.C., New York and most recently Hong Kong, where she (left her heart and) worked as a reporter for the Wall Street Journal.



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