While You Were Working - August 15

Innovation came to education finance

It sounds like a few trade schools are starting to put their money where their mouth is when it comes to how students finance their tuition. Select schools around the country are starting to allow students to avoid a set upfront tuition amount and instead agree to pay 8% of their gross monthly earnings for the our years following their graduation from the program.

The arrangement, known as an income share agreement, is gaining popularity at coding “boot camps” that are just a few weeks or months in duration and normally cost around $15,000. It is nice to see the schools with a big chunk of skin in the game so as to motivate them to actually educate students. The schools are making a bet that demand for coding talent is such that graduates will have no problem finding employment. And…

… According to Goldman Sachs, those schools are making a smart bet

Goldman Sachs is continuing its efforts to lure top tech talent away from Silicon Valley and other reaches of the startup tech world by loosening its dress code and buying curved computer monitors. Jeans and curved screens? That’s all it takes to attract top tech talent?

Nah, I reckon it is the six-figure salary that will win over the prospective employees. It also doesn't hurt that the reputation of Silicon Valley has taken some hits as of late. More than a quarter of all Goldman employees work in the engineering department, so it is a recruiting battle the firm must keep fighting.

It makes one wonder why Goldman doesn’t just open its own coding “boot camp” and offer students the opportunity to pay Goldman back with 8% of their net earnings for the next four years. Then if Goldman hires them, the firm would rake in a cool $32,000 for an education the student could have gotten for around $15,000.

Consumer debt kept flashing red

The New York Fed released its Quarterly Report on Household Debt and Credit and the picture isn’t pretty. Mortgage debt, automobile debt and credit card debt are all up. And so are delinquencies.

It seems to paint a pretty clear picture of just how the US economy is funding its growth in an era of stagnant wage growth: with lots and lots of debt.

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