A nonprofit bootcamp taps a network of community organizations and apprenticeships to help low-income learners land a career in tech. Also, what a stalled state bill says about the policy environment for outcomes-based loans.

Career Exploration to Apprenticeship

Tech training alone, even if it’s high quality, typically isn’t enough for students from low-income and diverse backgrounds to land a good job.

A growing number of training providers are taking a comprehensive approach, with career exposure and confidence-building on the front end of their educational programming, and work experience and job placement on the other side, plus a big dose of wraparound supports and help with social capital.

To do that, providers like Code the Dream are tapping local community-based organizations for the first part of the process, allowing both sides of the partnership to focus on what they do best.

The North Carolina–based Code the Dream offers free online courses in software development that students complete in 10 to 15 weeks. The nonprofit enrolled 434 students last year. Fully 90% of Code the Dream’s participants are low income, while 70% are people of color, and more than half are women or nonbinary.

Daisy Magnus-Aryitey, the organization’s co–executive director, has seen the bootcamp model evolve. When she graduated from the Iron Yard in 2015, a couple years before that coding bootcamp shut down, very few of the students were Black women.

The need remains strong for training programs grounded in the knowledge that there is no quick fix for helping underserved students, she says. And paid work experience is a big part of the solution.

“Code the Dream understands that it takes more than just technical training to help someone with limited resources launch a successful career,” says Magnus-Aryitey. “For many of our participants, they are the first in their family or community to gain employment with a living wage and benefits.”

Community Partners

Before enrolling, students often prepare for Code the Dream’s industry-specific courses by learning tech basics and getting career exposure. And instead of offering that short-term training itself, Code the Dream recruits students from a network of nonprofit, community-based organizations.

Code Tenderloin is one of those partners. The San Francisco–based workforce development organization is focused on the homelessness crisis in the city’s Tenderloin neighborhood.

The nonprofit’s free, short programs in computer literacy, job readiness, and precoding are aimed at “building up people’s confidence about re-entering the workforce,” says Jacqueline Watts, a volunteer program manager with Code Tenderloin.

The niche for Code Tenderloin’s training is the “early exposure phase” for careers, Watts says. “There’s a lot of players in the space that are running full-stack bootcamps.”

Code the Dream has proven to be a solid partner for Code Tenderloin. It offers deep tech training for students who want to progress with their education. And Watts says Code the Dream’s apprenticeship opportunities are a big draw.

“Getting employer partnerships is really hard,” says Watts, whose employer, Airbnb, has hired apprentices from Code the Dream.

Refcode is another partner. The Georgia-based nonprofit seeks to help refugees and immigrants start careers in software engineering, offering them a 10-week introductory class. And like Code Tenderloin, it’s run by a community of volunteers.

While graduates of Refcode can build impressive websites, the goal isn’t for them to start interviewing for tech jobs, says Brenton Strine, Refcode’s executive program director and founder. Instead, the hope is that graduates will be able to make a decision about whether they have the interest, aptitude, and ability to spend two more years pursuing a career in software engineering.

Rather than reinventing the wheel and creating more advanced courses, Refcode refers graduates to other programs. Code the Dream is the first provider Refcode usually recommends, according to Strine.

“They’re filling the other big gap in the career pipeline: the first job,” he says, calling Code the Dream’s apprenticeship a game changer. “It means that their graduates can get real experience on their résumés, which is a requirement for that all-important first entry-level job.”

‘Tandem Apprenticeships’

Apprentices build technical and collaborative skills in Code the Dream’s development shop, says Magnus-Aryitey, where they work in teams and alongside senior developers on real-world projects for paying clients.

Until recently, nearly all of the apprentices at Code the Dream worked on projects for nonprofits, universities, and governments, gaining hands-on experience while building tools for migrant farm workers or jobseekers with criminal records, among other unmet needs for communities.

Yet she says the organization’s relationship with tech employers has been more distant. “While companies might provide philanthropic support up front and hire grads at the end, there was no relationship in the middle.”

To help develop those ties, Code the Dream has introduced “tandem apprenticeships,” where participants do daily work on projects for tech companies. They remain employees of the nonprofit during the apprenticeship and continue to receive technical and wraparound support—including regular contact with mentors, who can answer questions they might be embarrassed to ask their new corporate colleagues.

SAS and Cisco are initial partners of this apprenticeship program. Part of the goal is to remove bias in the selection process by providing preselected, diverse apprentices. And because participants spend months working for a company, it can help them overcome barriers to landing a full-time job.

This approach offers its participants advantages compared to working directly as an apprentice with a company, particularly lower-income candidates who feel this “may be their one shot at their dream job,” says Magnus-Aryitey. That’s not the case for apprentices who maintain their primary employment relationship with Code the Dream until they receive an offer of permanent employment.

The Kicker: “They have multiple bites of the apple—allowing them to put their best foot forward and see where they fit,” she says.

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Income Share Agreements in Illinois

A compliance plan the Consumer Financial Protection Bureau developed with Better Future Forward, a nonprofit income-share agreement provider, gave much-needed regulatory clarity for ISAs, some experts said.

ISAs and the broader related category of outcomes-based loans, including New Jersey’s new Pay It Forward Fund, are often designed for shorter-term programs in high-demand fields.

The CFPB’s position, the plan released last November revealed, is that ISAs are private loans subject to the Truth in Lending Act, but they are also a unique form of lending that should be treated differently.

While still calling for federal legislation to govern the small industry, backers have been hoping that the plan provided enough guidance for ISAs to develop with less heat from regulators, lawmakers, and consumer groups.

Advocates for ISAs, including Better Future Forward, have been supporting a bill in Illinois that they said would create a strong consumer-protection framework for the industry at the state level. The law is needed, they argue, because consumer finance laws in Illinois (and in other states) were written for traditional fixed-principal and interest-based loans, not those where payments vary depending on the former student’s income.

“We see the difference our program makes for students working to succeed in school,” says Kevin James, the founder and CEO of Better Future Forward, which operates in Illinois. “But our mission is inhibited because current law does not provide effective regulation for ISAs.”

The proposal in Illinois drew fire from national and local groups. The bill passed in the House of Representatives but stalled in the State Senate.

Some of the terms in the bill are predatory, says Brent Adams, senior vice president of policy and advocacy for the Chicago-based Woodstock Institute. Most glaringly, he says, it would allow lenders to charge interest rates of up to 20% APR.

“Codifying rates as high as 20% would legitimize them,” says Adams, “which is unacceptable from a consumer-protection standpoint.”

The protections Woodstock proposed were much better than the terms in the bill, the group argues in a side-by-side comparison. For example, Woodstock called for a maximum effective APR of 7%.

James says the stalled bill applies basic elements of existing lending law to ISAs, including disclosure rules and usury limits, while adding new protections that currently don’t exist.

For example, a private student loan now could consume virtually unlimited amounts of a borrower’s income. The proposed law, however, would place a limit on the fraction of income that can go toward an ISA while setting a minimum income threshold under which a student borrower has no obligation to repay the loan.

Woodstock’s critique of the maximum effective APR fails to note that the APR limits in the bill are income-based, says James. The “imputed APR caps” under the proposal would limit higher interest rates to the biggest earners.

“The General Assembly in Illinois has previously considered and passed laws clarifying the treatment of ISAs in other contexts,” James says. “This law builds on those prior efforts, incorporates feedback from regulators and others, and adds critical new protections not available to students in current law.”

Adams, however, does not view a new law in Illinois as a necessary improvement.

“Giving the ISA industry its own law would create a regulatory environment that would foster the growth of the industry,” he says, “which includes ISA providers that are predatory.”

Open Tabs

Job Gains
College students who graduate this spring will be entering an exceptionally strong job market, with a 5.4% unemployment rate in April for workers ages 20 to 24, the lowest in more than 50 years, reports Mitchell Hartman for Marketplace. Labor-market participation for working-age Americans has hit 83.3%, the highest level since 2008. Employers are planning to hire 3.9% more college graduates than they did from the class of 2022.

Credentials in Hiring
Hiring rates of U.S. workers without bachelor’s degrees declined during the last year and are up only slightly since the pandemic began, providing no evidence of success in efforts to increase job opportunities for those without degrees, according to a wage-index analysis from the W.E. Upjohn Institute for Employment Research. Hiring volume and wages of workers with four-year degrees performed similarly during the past 12 months. But workers with graduate degrees saw substantial increases in both areas.

College ROI
Northern Arizona University is an emerging leader in providing valuable returns, writes Bill Gates, citing metrics from the Postsecondary Value Commission. He says the university is an engine of mobility for its students, half of whom are first-generation college students. Gates also touts NAU’s transfer policies for community college students and a tuition-free program for students with family incomes below the state’s median of $65K.

State Upskilling
Indiana has trained more 1,800 employees in data literacy in the past two years as part of a pandemic-induced push to increase state employees’ skills in key areas, reports Keely Quinlan of StateScoop. The upskilling program, which uses online courses from Arizona State University, has proved popular in part because the state marketed it as data “proficiency” training, rather than using the more pejorative term “literacy.”

Tech Certs
Google introduced a new Career Certificate in cybersecurity, citing the global shortage of 3.5M cybersecurity workers and the field’s lack of diversity. The training is designed for entry-level roles and to prepare students for the CompTIA Security+ exam. Google rolled out the certificate at an event held at Northern Virginia Community College, which is among an initial group of institutions that are offering it to students.

UK Apprenticeships
Roughly 350K people in the UK began apprenticeships last year, a decline of nearly 150K from 2017, when the government created an apprenticeship levy on businesses to help pay for programs, says a brief from the House of Commons Library. Some companies attributed the dip to complexity and a lack of flexibility in the funding system. The government made reforms while saying the quality of apprenticeships has improved.

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—Paul Fain