Federal funds now flowing to coding bootcamps? Not by a long shot.
It’s a case of the headline, not the copy, dominating the narrative. When the Department of Education announced its EQUIP program several weeks ago, initial news reports and even the many critics, such as at Slate and New America, missed the limited impact this program will have in expanding access to coding bootcamps. The reasons: (1) most fundamentally it doesn’t target the students of bootcamps, (2) the economics don’t really work, and (3) EQUIP is a tiny pilot.
The vast majority of students attending coding schools already have a four-year undergraduate degree. According to a study by Course Report, “79% of bootcamp graduates also have at least a Bachelor’s Degree” [emphasis in the original].
Compare in these charts how the traditional workforce development and post-secondary education ecosystem looked and how bootcamps are entering this ecosystem as a response to employer workforce needs.
Traditional Workforce Development and Post-Secondary Education Ecosystem
Bootcamps Compete with Graduate Schools
Notice that the only part of the workforce development and post-secondary ecosystem being squeezed are graduate programs. Reason: If you already have a four-year college degree and are underemployed or want to start a tech career, going to a coding bootcamp for five months and $12,000 — with a 85%+ likelihood of having a high paying job upon graduation — is a much better value than a two- or three-year MBA, JD, or master’s degree that may cost you $75,0000 to $150,000 with a very uncertain picture as to employment upon graduation.
Not targeting bootcamp students
Bootcamps are focused on enrolling and graduating students who already have a college degree and, in most cases, work experience. According to the same Course Report study mentioned above, the mean age of a bootcamp student is 31.
Here’s what seems to have been lost by many observers of the Department of Education’s EQUIP program: Only Pell-eligible students may participate. One must be an undergraduate student to be Pell eligible, but since bootcamps primarily serve students who already have undergraduate degrees and therefore are Pell ineligible, the EQUIP pilot is not making Title IV funding available to bootcamp students in any meaningful form.
The economics don’t work
The Department also says: “this experiment aims to focus primarily on low-cost programs.”
There are two ways to look at bootcamp costs. The primary way bootcamp students do is to compare mean bootcamp tuition of $11,852 with the cost (both in dollars and time) of a traditional two- to three-year and $75,000-$150,000 graduate degree. In this comparison, particularly with bootcamps’ strong outcomes, bootcamps are exceptionally low-cost.
But in the context of EQUIP, where for 2015–16 the maximum Pell award is $5,775, bootcamps are unlikely to be a low-cost program compared to MOOCs and innovative providers like StraighterLine.
EQUIP works by a college or university outsourcing to an innovative provider. In fact, part of the pilot is that the Department waives the prohibition on a university having third-party provide more than 50% of the content and instruction.
If you are a university and want Pell eligible students to attend a bootcamp that costs $11,852, but their maximum Pell grant is $5,775, there is a significant gap. It needs to be plugged either by the college subsidizing it, the bootcamp cutting its costs, or the student taking out loans (and the Department clearly wants some EQUIP pilots to rely solely on Pell grants).
A university needs to cover its costs of administering the EQUIP pilot. The quality assurance entity overseeing the pilot needs its costs covered. And the bootcamp needs its costs covered. Assuming a student wants to use their entire annual Pell grant for an EQUIP pilot (a dubious assumption), there isn’t enough Pell funding to cover all of these costs.
Participation in EQUIP for bootcamps and universities likely is a money loser and if they proceed it will be for social mission, political, and/or PR purposes, not because the economics work.
Limited slots for bootcamps anyway
The EQUIP pilot is for a maximum of 10 sites (i.e., up to 10 colleges or universities who partner with an innovative education provider like a bootcamp to offer a program to their Pell-eligible undergraduates).
The Department has made clear it wants to see MOOCs and other innovative providers participate in EQUIP. Assuming StraighterLine and several MOOCs are in the mix, it means that there are likely to be only be three to five bootcamps who are part of the EQUIP program.
While I have no idea what the programs will look like, my hunch is they are likely to be small numbers — especially because the economics don’t add up — maybe 50 students per year. Thus, the EQUIP pilot might serve a few hundred bootcamp students. That is hardly Title IV funding flowing to bootcamps.
Where are Workforce Dollars rather than Title IV?
With EQUIP, the Education Department is trying to encourage colleges to engage in innovative partnerships and spur innovation in accreditation, all while serving low-income students. Laudable goals, and we certainly need to see all three happen.
But if the federal government wants to spend taxpayer dollars to broaden access to coding schools, it seems the most appropriate venue would be via the Department of Labor and the Workforce Investment Act, not Title IV.
Bootcamps arose to meet specific employer demands for more qualified tech workers and serve students who have already completed their post-secondary education journey. Title IV is an odd funding source for bootcamp students.