Learning Curves Topic
  • Continuing Education
Learning Curves
January 18, 2018

A Cost-Effective Route to Employment

MHT Partners  | Education Investment Bank

Is a bachelor degree worth the cost? The rising cost of higher education in connection with increasing student debt levels continues to garner both public and political attention. There is greater scrutiny of traditional colleges and universities as well as growing pressure to demonstrate their value proposition to students. As the post-secondary market continues to face headwinds, new tuition models in education have evolved, are gaining momentum and producing exceptional results.

Education companies with alternative tuition models are emerging in fields where the demand for qualified employees far exceeds supply. The revenue models for these businesses are unique in that these companies are shouldering the responsibility of helping students find a job in order to recoup their investment in the student.

Teachers of Tomorrow saw an opportunity to capitalize on the growing teacher shortage in the U.S. Since 2005, the company has placed more than 42,000 teachers into K-12 schools through its alternative teacher certification program. Teachers of Tomorrow’s deferred tuition model requires a low upfront payment from the student, with the remaining balance paid in monthly installments upon achieving a teaching certificate and securing a full-time position.

Several coding academies are also using alternative tuition models to capitalize on the growing demand for software developers. The Bureau of Labor Statistics projects 32.4% growth in employment for software developers, while the average growth for all occupations is 14.0%. Viking Code School, recently sold to Thinkful, offers its students income share agreements, where students only pay once they obtain a qualifying job. Companies such as Viking that make tuition contingent on student outcomes do more than just train students in web development, they help students make the leap to full-time employment – in many cases, at some of the most distinguished technology companies in the world.

The desire to fill the gap in skilled employees is not exclusive to students with bachelor degrees. MissionU seeks to produce data and business intelligence analysts through its career-focused curriculum. The company attracts high school graduates to participate in a one-year, tuition-free program. Instead of acquiring student loans to attend the program, students repay a small percentage of their salary once they launch their career.

As accountability becomes increasingly important in the realm of education, we expect to see more career-focused businesses with alternative tuition models. One commonality among these types of businesses is their strong student support services. In addition to basic training, interview and test preparation, these businesses have excellent relationships with partner companies in their respective fields. These relationships help to maximize opportunities for employment among their students and produce a strong and quantifiable value proposition for students.

Submit a Comment

Your email address will not be published.