Announcing our Deferred Payment Program

Launch School
Aug 28, 2020 · 6 min read

Over the past eight years, we’ve built one of the best software engineering schools globally. Our graduates command, on average, $115,339 within ten weeks after graduation. We now want to expand those we can serve by offering a Deferred Payment Program (DPP), where students pay nothing upfront. We believe in our curriculum so much that if graduates can’t get a job that pays at least $60,000, it’s completely free.

A More Student-Centric Approach

Many existing programming schools offer some form of deferred payment structure, but we wanted to create one that is far more student-centric than existing options. We feel that deferring payments, similar to student loans in higher-ed, can be used in a predatory way. When we set out to design our deferred program, we wanted to avoid that: no misleading statements, no over-hyping, no predatory entrapment, and low-consequence switching cost. Here’s what we came up with:

Photo by 🇨🇭 Claudio Schwarz | @purzlbaum on Unsplash

Lowered Switching Cost — Leave With Little Consequence

Unlike other training programs that offer a similar deferred pricing structure, our DPP doesn’t lock you into an Income Share Agreement (ISA) from the outset. If it’s not working out, simply leave Launch School and pay us the monthly fee ($299/mo) that you were in Core; your first month in DPP is on us, so there’s even less risk. An ISA from the outset is very restrictive: it obligates your future salary even if the training wasn’t a good fit for you. It also prevents you from joining a different ISA-based training program. In our DPP, you can leave without any of those consequences any time before you sign the ISA (which is at the very end, when Capstone starts). We view this ability to leave Launch School as a feature. We think this is a far more student-centric approach that prevents predatory educational entrapment schemes so often seen elsewhere.

2. Highest Salary Guarantee

Our DPP isn’t the first to have a “make $X, or it’s free” guarantee. But what makes ours unique is that we have the highest salary threshold at $60,000 guaranteed. We believe in our curriculum so much that we want to lead the industry in this threshold. This is our way of saying: “We truly believe in our curriculum, and we feel you can reach your goals with it, or you don’t have to pay us anything.” But on top of the highest salary threshold, we also made a very critical update to how we come up with this number — see the next point below.

3. Salary Guarantee Considers Base Salary Only

Related to the previous point, our salary guarantee only refers to the first year base salary. This is tremendously advantageous to the student.

Those new to ISA-based deferred payment plans may wonder why we’re mentioning this section at all. It turns out there are deferred payment programs out there that looks at all income for their salary guarantee. This could include raises, bonuses, and even secondary income, which all add up substantially. We won’t look at any of that. We will only look at your first year’s base salary to determine whether you met our salary guarantee threshold. This means, if your base salary isn’t $60,000, then you won’t pay us anything. This is hugely different from making, for example, $55k base with $15k supplemental consulting income on the side (in this scenario, other deferred programs would say that you’re making $70k). When you compare our DPP with any other program, make sure to note this significant difference.

Photo by David Pisnoy on Unsplash

ISA Fee Only Considers First Year Base Salary

Following with point 3 above, our Income Share Agreement (ISA) also only looks at your first-year base salary to determine the total cost. It’s common practice for some programming schools to look at all income for the year, as mentioned above. For example, say you made $45k base salary and then did some consulting on the side totaling $20k for the year. In those other deferred programs, they’d calculate your total annual income as $65k, and that’s the number they would use to do all their calculations. Our DPP will only look at the $45k base salary. Further, it’s common for other deferred programs to extract a percentage of your salary for multiple years. This means if you get a raise in your 2nd year at work, that will be included in the ISA calculation. In our DPP, we would only look at the first year base salary, which more accurately reflects the original promise and is far more student-friendly.

5. Shortened ISA-bound Duration

Our DPP comes with a, “or it’s free” guarantee, but it also comes with a time-duration that bounds the ISA. These two things go hand in hand: if you don’t land a job that pays the salary threshold (that’s $60k for Launch School’s DPP) within the time duration, you don’t have to pay anything.

The time-duration bound for our DPP program is 12 months. The complete Launch School DPP promise is this: if you don’t get at least a $60k base-salary job within 12 months of earnest and full-time searching, you don’t have to pay us anything.

Most other similar programs bind their ISA to you for multiple years. They will say something like this: if you don’t get a job that pays $X within Y years, you don’t have to pay us anything. This sounds fine in theory, but the problem is that this is extremely detrimental to students. In our opinion, this is one of the most damaging outcomes from typical deferred payment programs.

Here’s why: suppose a student participates in one of these programs that bound the ISA to the student for five years (this isn’t made up — there are real programs out there that ask for this duration). The student graduates and then couldn’t find a job after 12 months of search. The student then goes to another training program and has a great experience and can get a job after graduating from that second training program. Now it gets tricky: the student’s ISA from the first training program is still in effect (remember, it’s bound for five years!), so the student now has to pay their ISA fee even if the first training program didn’t help at all.

Worse, ISAs are mutually exclusive, meaning you cannot take an ISA-based training program when another ISA already bounds you. This means that students who took that example training program with a 5-year ISA cannot take another ISA-based training program within five years.

That could be very damaging to the student, and it’s one major reason we decided not to lead with the ISA and shorten our ISA duration to 12 months.

Try the Launch School DPP First

We feel we’ve designed our DPP program to be the most student-centric approach available. We’re not saying we have the best curriculum or training program. We certainly think we do, but what one considers “the best” education depends on student-school fit — it’s subjective.

What we’ve done is built a process where we don’t entrap students and you can try us without major consequence. This isn’t true for the vast majority of training programs out there. If you try them first, there are major consequences that can last years. If you try us first, we allow you to leave before making a major commitment that can cause long-lasting damage.

To learn more about the Launch School DPP, visit us at LaunchSchool.com/deferred.

Update: Webinar Recording

We conducted a webinar on Sept 3rd, 2020. The recording for this webinar is now available at: https://launchschool.com/deferred#webinar-recording

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