Note that the situation for student loans has changed due to the impact of the coronavirus outbreak and relief efforts from the government, student loan lenders and others. Check out our Student Loan Hero Coronavirus Information Center for additional news and details.
* * *
If you’re looking for a new career with a company that pays well, learning how to code might be for you. But with the upfront investment that continuing education requires, you might be wondering, “Can you get a student loan for coding bootcamps?”
Fortunately, it’s likely you’ll be able to find a loan to finance your coding bootcamp. Plus, some bootcamps offer income-share agreements, wherein you pledge a percentage of your salary to the school for a specified number of years after you graduate. Considering software engineers, web developers and their peers tend to make high salaries, this approach could be a smart way to finance your program and jumpstart your career.
If you’re trying to figure out if you can get student loans for a coding bootcamp so you can learn to code and increase your earning potential, we highlight six strategies to help you with your decision.
Can you get a student loan for a coding bootcamp?
A coding bootcamp is an intensive training program for web or software developers. Coding schools like Bloc, the Flatiron School and General Assembly, for example, prepare you for a high-earning career in just months. Upon graduation, you’ll be ready for an entry-level job as a coder.
But since many bootcamp programs are run by private, for-profit organizations, they typically aren’t eligible for federal financial aid, including student loans.
However, there are other ways to get a student loan for a coding bootcamp, or finance your program through an alternative method.
Here are six strategies to consider:
1. Research payment plans
2. Research the federal EQUIP program
3. Take out a private student loan
4. Consider an income-share agreement
5. Consider a personal loan
6. Check out guaranteed-hire schools
Some schools offer tuition payment plans for students. Bloc, for example, allows you to break up your payments over the course of several months, rather than paying everything at once. Bloc also offers extensions, if needed.
You’ll still have to find the cash on your own, but buying more time gives you a chance to save up, seek out scholarships or apply part-time job earnings to your cost of attendance.
In 2016, the Department of Education announced the launch of the Educational Quality through Innovation Partnerships (EQUIP) program.
EQUIP is a pilot program that allows students — in particular, those from lower-income backgrounds — to qualify for federal financial aid to pay for nontraditional education programs, like coding bootcamps.
Students who qualify for EQUIP can access all forms of federal aid, including student loans and grants. As a lower-income student, you could receive a Pell Grant for coding bootcamp.
After graduation, you could take advantage of federal aid benefits, such as income-driven repayment (IDR) plans for federal student loans and even loan forgiveness programs.
To get financial aid, make sure you complete the Free Application for Federal Student Aid (FAFSA). The FAFSA for coding bootcamps is the same as the application for aid for regular schools.
You can learn more about programs that qualify for EQUIP via the Department of Education.
If you don’t qualify for federal financial aid, another way to pay for school is to take out a private student loan.
Many traditional banks and financial institutions do not let borrowers take out student loans for nontraditional programs, but there are now lenders who cater specifically to coding bootcamp students. Some lenders, like Earnest, even work directly with coding schools.
Bootcamp lenders tend to offer higher interest rates and stricter repayment terms than federal loans, and they’re ineligible for IDR plans. In addition, the loans could only cover the cost of tuition, so you’d have to find other ways to pay for things like living expenses.
If, however, you take out a private loan and cannot find a job after completing the program, you’ll still have to repay the loan. Make sure you research your school’s job placement success rate — though you should also double-check that this is the career you want before applying for a loan.
If you keep those caveats in mind, private student loans can be a useful tool to help you get the education you need to launch your new career.
While bootcamp lender Pave is no longer in business, lenders such as Skills Fund could help you finance your course.
Another way to finance your education is to agree to an income-share agreement (ISA). Some coding bootcamps let you waive tuition in the short term if you agree to pay back a certain percentage of your salary following graduation.
With an ISA, you’ll agree to pay back a percentage of your salary for a certain number of years up to a maximum amount.
- If you’re making a decent salary after graduating, an ISA could be advantageous.
- But if you’re not making much money, sending off a chunk of your paycheck to the coding bootcamp every month could pose challenges.
- Earning a significant income could also mean repaying more than you would have shelled out for a student loan.
Fortunately, some schools offer employment guarantees to put your mind at ease. See so-called guaranteed-hire schools (No. 6, below).
|Want to learn more about ISAs? Check out…|
|How This Ex-Chef Used an Income-Share Agreement to Double His Salary|
If you can’t take advantage of a student loan or an ISA, you might think about taking out a personal loan from a bank or financial institution.
But personal loans can come with high interest rates and short repayment terms, so make sure you can afford to pay it back before signing on the dotted line.
If you’re not currently working or you have poor credit, you might need a cosigner — a friend or relative with excellent credit and a stable salary — to sign the application with you. Having a cosigner increases your chances of getting approved for a loan and receiving a competitive interest rate.
Many coding bootcamps, such as the Flatiron School, stand by the quality of the programs they offer. They’re so confident that what you learn will be valuable that they offer a tuition-guarantee for certain programs.
If you meet set criteria, these schools will reimburse your tuition fees if you fail to get a job within a specific timeframe of graduation.
A tuition guarantee reduces some of the risks of paying for a coding bootcamp. You can be confident that if the program is ineffective and you struggle to find a job, you won’t be out thousands of dollars.
Jumpstart your career with a coding bootcamp
If you’ve decided to switch careers, figuring out how to get student loans and pay for school can be challenging. Thankfully, the industry is growing, and more lenders are willing to work with bootcamp students.
By doing some research and identifying all of your options, you can find a way to finance your education that also fits your needs.
And if you’re looking for a reputable coding bootcamp, check out our list of continuing education programs.