Untapped Potential: Funding Future Careers Through Income Share Agreements
by Ashley Rudolph and Tom Ogletree
Embarking on a career change is a major investment. To say it’s a tough endeavor is an understatement, as it usually requires time, money, and effort to bridge skills gaps and make inroads in a new field.
At General Assembly, we’ve helped over 13,000 individuals launch new careers through our full-time Immersive programs in coding, data, and UX design. GA courses aren’t cheap, but they have a high return on investment and are specifically designed to prepare students to be successful and secure high-wage, high-potential roles as web developers, UX designers, and data scientists.
However, many students can’t afford this education out of pocket. About 40% of our full-time students use third-party funding sources — including loans, scholarships, GI Bill benefits, and government programs — to attend GA. There are more who would like to do the same, but half of those who apply for loans get turned down, and our pool of scholarship funding is not big enough to meet demand.
The reality is that many of our students already have debt from past education or credit cards that affects their ability to secure new financing. Today, the typical college student borrower graduates with an average of $22,000 in debt. A recent study revealed that over 30% of recent student borrowers are facing serious struggles with repaying debt loads. The combination of existing repayment obligations and the looming risk of default leaves many adults with extremely limited funds to devote to continuing education. It’s a frustrating cycle — individuals are stuck in low-paying jobs they don’t love, but they can’t afford the education that will fast-track them into a new line of work.
At GA, we never want finances to stand in the way of someone motivated enough to break into a new field. In order to create more access to our programs, we sought out new ways for career-changers to fund their education.
One concept that caught our attention was income share agreements (ISAs), a model of income-based repayment that’s gaining traction among education and training providers. After a year designing this program, we’re excited to launch Catalyst, GA’s ISA program. Since many people are curious about ISAs, we wanted to share some insight around why they’re a viable option for many students, regardless of their income, credit history, or background.
(You can read about how and why we created the Catalyst program in more detail in our white paper, Untapped Potential.)
How GA’s Catalyst ISA Program Works
The gist of the Catalyst program is this: Students can take a full-time GA Immersive course in web development, data science, or UX design at no upfront cost. After they graduate and land a job earning at least $40,000 annually, they’ll start paying back 10% of their income over 48 monthly payments.
We chose this income share amount because it’s comparable to what students might pay for a loan, based on our typical starting salaries. According to PayScale, average starting salaries for web developers are $54,365 nationally, and data from Climb Credit, one of our loan partners, shows that GA graduates report median starting salaries of $60,000 after taking an Immersive course.
Payments are maxed out at 1.5 times the initial cost of tuition (currently about $15,000), meaning that higher earners may end up paying as much as $22,425 total, while lower earners will pay less. We’re working with Vemo Education, the largest provider of ISAs in the United States, to manage the program’s day-to-day operations and administration.
We think these terms benefit career-changers for several reasons:
- Approval based on future potential. Many loan applicants get rejected because of low credit scores or other debt. Acceptance to Catalyst instead depends on students’ drive and readiness to thrive in the course and on the job.
- Employment first, payments later. Students can devote their time and energy to excelling in class and job searching — without the looming stress of upcoming payments.
- Career focus. ISAs and career support go hand in hand. GA’s Career Services team is dedicated to making sure students land a job in their field of study through one-on-one coaching, exclusive hiring events, networking opportunities, and more.
- Flexible career pathways. The $40,000 minimum salary allows students to accept a lower-paying job they’re passionate about, cultivate a freelance business, or even start their own company without the pressure of loan repayments.
- Life happens? Payments stop. Students can pause payments at any time if they stop working, whether due to unemployment or personal, family, or health-related reasons.
Our Approach to ISAs
We took a student centric, research-based approach in deciding whether to introduce ISAs. It was essential to develop a model that does not put the burden only on the student, but also ensures that GA is incentivized to help participants meet their career goals. First and foremost, we wanted to introduce an option that would be attractive to all individuals, regardless of income, credit history, or background.
Data from the ISA industry at large informed our approach to designing the Catalyst program, but our own unique experience serving thousands of students defined our terms. Here are some of the considerations we made while exploring ISAs as a payment option:
- Student feedback. We reached out to alumni to understand whether or not an ISA-type structure would be appealing to them. We learned what features resonated with our community and built them into our program. More than anything else, students valued not having to make payments while in school and during their job search.
- Current payment performance data and trends. After analyzing data from past GA applicants and students, we knew that affordability was still a frequent barrier. Loans, government funding, and scholarships are increasingly popular options for our community, but we couldn’t meet demand due to obstacles like a small scholarship pool and applicants’ inability to secure loans.
- A strong focus on career outcomes. It’s incredible what GA students can achieve after taking one of our full-time programs, regardless of their educational and professional backgrounds. We strongly believe that ISAs can’t work without outcomes-based programming, and GA’s Career Services team is solely focused on ensuring that students in our full-time courses have the tools they need to land a job after they graduate. We track student progress, have a Big Four accounting firm audit our job-placement data, and share our outcomes reports publicly every year.
- Likelihood of students’ success. Students’ actions prior to enrollment reliably indicate how they’ll perform in their course and job search. To ensure Catalyst participants are prepared, applicants must complete our admissions requirements, course pre-work, and a readiness assessment. Our data shows that good performance on the assessment is the best predictor of success in the program and the job search.
- Commitment to transparency. ISAs are new and we know there’s still a lot to learn about the model, but we’re optimistic. Because of this, we’re pledging to defining key success metrics and making it publicly available.
Thanks to funding from the investment firm Kennedy Lewis, we’re able to serve 5,000 students through the Catalyst program in the coming years. We chose to work with the company because of its alignment with our mission and the goals of the program. “The positive social impacts of ISAs are extensive because they align the quality of the education with the cost,” said David Chene, co-founder and managing partner at Kennedy Lewis. “ISAs avoid the debt trap associated with student loan debt as a student will never be asked to pay more than they can afford.”
We’ll learn a lot along the way and are committed to maintaining transparency with our students, our partners, and others interested in the future of ISAs for accelerated career training. We’ll share updates regularly as we learn, iterate, and improve so we can continue to create greater access to GA’s programs and empower people to pursue the work they love.
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Ashley Rudolph is GA’s Director of Consumer Operations and Financing, overseeing global campus operations, as well as General Assembly’s loan and income share agreement programs.
Tom Ogletree is Senior Director of Social Impact and External Affairs and manages GA’s communications, public affairs, and social impact initiatives.
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Since 2011, General Assembly has trained individuals and teams online and on campus through experiential education in the fields of coding, data, design, and business. We believe everyone should have access to leading-edge education that will transform their careers — and their lives. Learn more about our Catalyst ISA program and other financing options, and find out what we’re doing to break down barriers to employment, diversify the workforce, and close the skills gap.
5 Ways to Inspire Your Design Teams
Tyler Hartrich, faculty lead for General Assembly’s User Experience Design Immersive course, leads a session at the 2018 99u Conference. Photos by Craig Samoviski.
As design educators, we at General Assembly prepare students for their careers — but how can we ensure designers continue to grow their skills beyond the classroom? Industry-leading work emerges from teams that persistently enrich themselves by fostering new skill sets and perspectives. But between deadlines, client fire drills, and day-to-day trivialities, a focus on growth can often be put on the back burner. In the long-term, this can result in uninspired designers who don’t grow to their full potential, and teams that opt for the easy way out instead of taking on risks, challenges, and explorations that drive innovation.
When Adobe approached General Assembly about leading a session at the 99u Conference — an annual gathering for creative professionals to share ideas and get inspired to help shape the future of the industry — we knew it would be a great opportunity to guide leaders in creating natural spaces for learning within their teams and workflows.
In our sold-out session “Onboard, Engage, Energize: Tactics for Inspiring a Crack Design Team,” Tyler Hartrich, faculty lead of GA’s full-time User Experience Design Immersive course, and Adi Hanash, GA’s former head of Advanced Skills Academies, shared insights on how directors and managers can structure spaces for learning within their teams, and encourage new approaches to problem-solving. The presentation was developed in collaboration with Senior Instructional Designer Eric Newman and me, GA’s director of product design.
At the event, we outlined the following five ways leaders can encourage their teams (and themselves) to keep learning and improving throughout their careers, including an exercise to spur creativity, reflection, and action. Read on to learn more, and find out how you can perform the exercise with your own team.
Eric Ries on 5 Lessons Companies Can Learn From Startups
Since the Great Recession in 2008, startups have become a major force in society. Today’s entrepreneurial culture — with lower financial barriers to launching a business and people’s increasing desire for flexibility, freedom, and purpose in their work — has bred a whole generation of young companies that have quickly scaled and revolutionized a wide range of industries. A number of those companies, like Airbnb and Uber, have achieved explosive growth and evolved into bonafide conglomerates in recent years.
Meanwhile, older organizations looking to remain relevant and thrive are striving to figure out the practices that allow these startups to excel — and how their corporations can adopt them in order to catch up.
General Assembly Joins the Adecco Group in Transforming the World of Work
GA was founded on the principle of empowering people to pursue the work they love. In the eight years since we opened our first campus, we have had the privilege of working with students, governments, and the world’s largest companies to create opportunities to radically transform careers and economic prospects.
Today I’m excited to announce that we have reached an agreement to be acquired by the Adecco Group. This is a milestone, a reflection of the world waking up to the skills gap we face, and the opportunity to reshape the relationship and connection between education and the world of work. It’s the result of the passion, commitment, and hard work of thousands of individuals. It’s also the output of the incredible focus and determination of our students, our instructors, and the tireless GA team. For all of those reasons, I’m thrilled to get to share the news.
The Adecco Group is a Swiss-based, truly global company operating in 60 countries that offers 360° HR solutions from flexible to permanent employment, career transitions, and talent development services through its network of independent brands. On my first trip to Switzerland to meet CEO Alain Dehaze, I was deeply impressed by the Adecco Group’s commitment to its people, values, and mission, and struck by what a powerful platform it could be for General Assembly’s vision. We were exuberant at the idea of joining forces, and shaping the future of work, talent, and education. The possibilities to expand the scope of what we can do, and the impact we can make, are almost limitless.
Because of the unique structure of the Adecco Group, we were able to craft a structure where General Assembly will run as a fully independent company underneath its large umbrella. We will, however, be able to leverage the knowledge and network of the world’s largest human capital company. Our mission and vision won’t change, but our ability to provide opportunities to our alumni, students, instructors, and clients will massively increase. In all the important ways we will still be GA, only better.
When my co-founders Matt Brimer, Brad Hargreaves, and Adam Pritzker and I started GA, we wanted to build a community focused on “learning by doing” in New York City. Today, that idea has evolved into a global school that helps amazing individuals and Fortune 500 teams. We have 20 campuses on four continents, more than 50,000 full- and part-time alumni, and over 500 team members who work incredibly hard on behalf of our worldwide community.
I am excited about the power of our partnership with the Adecco Group and what we can do together. The future of work has never been more important and I look forward to helping shape it for many years to come.
How the Marines Prepared Me for a Career in Coding
While stationed in Okinawa, Japan, in 2008, I wouldn’t have guessed that my time in the Marine Corps would have prepared me for a future in coding. At the time, the 30 Marines in my platoon had access to just one shared computer. It served only two functions: completing online training requirements, and looking up one’s online military record.
I never suspected that nine years later I would be designing and building websites and applications in an intensive web development course, General Assembly’s Web Development Immersive (WDI) program.
My path toward coding was a winding one. As a Marine on active duty, I was stationed in Japan, Kenya, Sudan, Italy, and Pakistan. Later, after transferring to the Marine Corps Reserve, I pursued a bachelor’s degree in international affairs from George Washington University. While studying at GW, I worked at the nonprofit Veterans Campaign, where I was tasked with helping to rebrand the organization. Though I had little technical experience, I created an entirely new web presence for the organization and migrated its old content to the new website.
The Best Prototyping Tools for UX Designers in 2018
After synthesizing user research and thoroughly uncovering problems to solve, user experience (UX) designers begin their design by ideating on a number of solutions. This is where the creative magic happens! Designers sketch to explore many workable solutions to user problems, then narrow them down to the strongest concept. Using that concept, the next step is creating a workable prototype that can be tested for viability against the user’s goals and business needs.
Don’t Frustrate Users With Gaps in Your Product Experience
There are countless steps where the product experience can break down.
There are countless steps where the product experience can break down. Have you ever been waiting at the corner for a ride-sharing pickup, and while the app swears the driver is right there, there is no car in sight? Or how about seamlessly ordering groceries in an app, then waiting well past the delivery window with no sign of your avocados? Ever called customer service by phone to learn they have no record of the two detailed chats you had with online agents about your issue? We’ve all been there.
As consumers who increasingly rely on technology to help us wrangle a vast range of goods and services, we’ve all experienced pain points when really good software doesn’t equate a really good experience. All too often, there’s a breakdown that occurs outside product screens, when a product or process hits the reality of the human experience or a user fails.
Take a peek at the diagram above, which charts the various user touch points that can occur with your brand in a product experience loop. Users interact with a product through many different channels and modes of communication, and bridging the gaps between them is essential to your product’s success. If you present users with a custom call to action in a social media ad, your customer service teams must be ready to respond. If you build an offer email that is redeemable at a brick-and-mortar retail location, the cashier will need tools to redeem it.
The Path to a Diverse, Vibrant Tech Community
Anthony Pegues, second from right, with Per Scholas CEO Plinio Ayala (far right), and fellow graduates from CodeBridge, a web development training partnership between General Assembly and Per Scholas.
Anthony Pegues was a part-time janitor in the suburbs of New York City who sought a way into a rewarding career. He saw tech — and web development specifically — as a viable path, but didn’t have the resources to get the skills he needed to be ready for a job in the field.
Unfortunately, Pegues’ situation is all too common. There are plenty of tech jobs available, and people who are eager to fill them. But many passionate, prospective developers from underserved and overlooked communities do not have the resources, time, or opportunities to pursue their passions and get the skills they need to transform their careers.
At General Assembly, our central mission is to create pathways so that everyone with the dedication and commitment to reshape their career can do so, regardless of their prior experience or ability to pay for the training they need to get there. To this end, we’ve spent the last few years launching and refining strategies and programs that break down barriers and contribute to the diversity of the tech sector.
But there’s still much more work to do.
How Blending Lean, Agile, and Design Thinking Will Transform Your Team
Jeff Gothelf’s new book, Lean vs. Agile vs. Design Thinking
The following is an adapted excerpt from Lean vs. Agile vs. Design Thinking by designer, team leader, and business coach Jeff Gothelf.
In 2016, I was preparing with clients for an upcoming training workshop focused on coaching a cross-functional team of designers, software engineers, product managers, and business stakeholders on integrating product discovery practices into their delivery cadences. During our conversation, my client said to me, “Our tech teams are learning Agile. Our product teams are learning Lean, and our design teams are learning Design Thinking. Which one is right?”
The client found the different disciplines at odds because these seemingly complementary practices forced each discipline into different cadences, with different practices and vocabularies targeting different measures of success.
The engineering teams, using Agile, were focused on shipping bug-free code in regular release cycles (many teams call these “sprints”). Their ultimate goal was an increased velocity — the quantity of code they could ship in each sprint. Product managers, using Lean, were most interested in driving efficiency, quality, and reduction of waste through tactical backlog prioritization and grooming techniques.