Student Loans for Coding Bootcamp
- February 21, 2017
- Posted by: Jeff Gitlen
- Category: Student Loans
If you’ve read the news lately, you likely know that there is a huge tech gap: There are lots of tech jobs open, and no one to fill them. People simply don’t have the skills to take on computer programming and other tech-based jobs. Coding bootcamps hope to change that. These bootcamps teach people the skills they need to become computer programmers.
These technical training programs typically last for 8-12 weeks, and are highly concentrated with the most relevant coding information. The laser-focused programs cover various coding languages, such as Ruby, and web development frameworks like Ruby-on-Rails. This is just a small sample of the information you’ll learn if you join one of the bootcamps.
By the time you complete a coding bootcamp, you should have all the skills you need to build web applications and take on a high-paying job in the tech industry. It is easy to find openings due to the shortage, so you can expect to find employment quickly.
That sounds great, but there is one catch: These bootcamps can cost thousands of dollars. Unless you have an extra $5,000-$20,000 lying around, you will need some sort of financial help to attend the bootcamps. Fortunately, you have a couple of options for this: You can go with federal financial aid or you can secure a loan from a private lender.
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Federal Financial Aid for Coding Bootcamps
At one time, it was impossible to receive federal financial aid for coding bootcamps. The programs didn’t meet the strict federal financial aid guidelines, and the creators were fine with that. The creators happily worked outside of federal regulations and still managed to attract countless students.
It didn’t take long for the federal government to understand the importance of coding bootcamps, though. The government realized it could help more students attend these bootcamps by offering federal financial aid, which meant opening itself up to non-traditional educational platforms.
With that in mind, it decided to launch EQUIP (Educational Quality through Innovation Partnerships). This is still in the experimental phase, but as of now, it provides financial aid for a select number of programs. If this experiment works, expect the government to add additional coding bootcamps into the mix.
If the experiment is any indication, the federal government is only going to provide federal funding for low-income students. Also, expect regulations to come into effect as the experiment grows. These regulations will likely have a large impact on bootcamps that participate in the federal program.
That means most people will need to obtain funding from private lenders. These lenders offer a bit more flexibility for students.
Private Loans for Coding Bootcamps
Private lenders are typically the best student loans for coding bootcamps. They offer loans for a wide variety of bootcamps, making it much easier for students to attend the program of their choosing.
Before you apply for a private loan, it’s important to understand what is involved to avoid any surprises.
First, the terms are typically short, in large part because bootcamps are shorter than most post-secondary education options. Don’t be surprised if a lender expects you to pay the loan back in as little as a year, although most last from 2-3 years. If you need extra time, some lenders offer terms as long as five years, but you should expect to pay a great deal of interest if you stretch the repayment out to five years. It is a much better idea to choose a shorter term, if you can afford it, so you can put the loan behind you and focus on making money.
In addition, some lenders look at the program’s outcomes, assessing things like dropout rates and job placement. This allows lenders to offset the risk by only offering loans to students who enroll in programs with proven track records; lenders want to make sure you will graduate and get a job before they offer you the money.
It’s also important to understand that interest rates from private lenders fluctuate greatly. For instance, top lender Affirm offers an APR that ranges from 6 percent all the way up to 30 percent. Pave is another good example: It offers an APR that ranges from 7 percent all the way to 27 percent. It is very important to look at your terms before you sign for the loan.
Speaking of interest rates, private lenders put a lot of thought into how much to charge you. You might think your credit score is the only thing that matters, but that is just one piece of the puzzle. Some lenders also look at your income-to-debt ratio and your savings. Some might even look at your college performance when determining your APR, with the idea that past performance indicates how you will perform at the bootcamp. The better you perform at the bootcamp, the more likely you will end up with a high paying job, so this is important.
If your credit and financial history make you ineligible for a loan, you may need a cosigner. Most of the private lenders accept cosigners to support the main borrower, but there are options for those without a cosigner.
Finally, you can secure funding faster by considering the partnerships between schools and lenders; most lenders have preferred programs. Enrolling in one of these programs will help the process go much faster so you can get started with your bootcamp sooner – if you’re ready to start a new career, every day counts.
Coding bootcamps are growing in popularity, which has caused new funding sources to open up. Consider your funding options and select one that has the terms you need to succeed. Selecting a loan with favorable terms will ensure that you can pay it back in a timely fashion. Then, you can begin enjoying all of that extra money you’ll make as a computer programmer.
Author: Jeff Gitlen
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