Lambda School, a San Francisco-based coding school and Y Combinator alum, just secured $4 million in funding, VentureBeat reports. It also welcomed the first batch of graduates from its software engineering class—a group of 20 students, five of whom were offered jobs a week after graduation.
What sets Lambda School—whose classes are fully remote—apart from a lot of other coding programs is that students are not expected to pay for the course upfront. They have the option of doing so, but cofounder Austen Allred told VentureBeat that more than 90% of students opted for the income-share agreement, which means they only have to pay Lambda School if they land a job that pays at least $50,000. Depending on the arrangement, they are then expected to pay Lambda School 17% of their salary for up to two years. (The maximum payment for the two-year arrangement is capped at $30,000.)
As VentureBeat points out, that is significantly higher than monthly student loan payments, though Allred claims that most job offers are coming in at over $80,000:
Even as tons of job offers come in in low-cost-of-living areas, the average salary for Lambda School students is >$80k/yr
— Austen Allred (@AustenAllred) January 29, 2018
Still, whether or not this is a viable business model for Lambda School is another question. Salaries that are upwards of $80,000 don’t just offset the cost of tuition payments for students—they also secure money for the school itself.