2022 End of Year Review of the Tech Education Industry

2022 Online Learning Predictions Recap

Season’s Greetings!

As another exciting year comes to a close, Nucamp is not only reflecting on the progress we’ve made, but also on the growing transformation of the tech education industry as a whole.

At the beginning of 2022, we remained optimistic about the future of online learning.

We predicted it would continue to grow, adjust, and innovate in the areas of accessibility, affordability, and dependability.

We also forecasted that eLearning would facilitate changes in the hiring and training processes for many employers.

Nucamp’s 5 predictions about the tech education industry in 2022 included:

1. Education would continue to go digital
2. Income Sharing Agreements (ISAs) would decline
3. Increased scrutiny of bootcamp graduation and job placement rates
4. Increase in adoption of Revature model in the US
5. More tech apprenticeships

Education would continue to go digital

According to Research and Markets, the global online education market is projected to reach a total market size of $319.167 billion USD in 2025, increasing from $187.877 billion USD in 2019.

Organizations are more interested in having tech-savvy employees.

eLearning has become the most popular way for businesses to provide tech training for their workforce.

Companies recognize that investing in the professional development of staff is key to retaining existing talent and attracting new talent.

It’s also crucial to the success and growth of their businesses.

As a result, the role of online learning is expanding.

More employers are using online training to upskill their current workforce.

40% of Fortune 500 companies use online training, and this number is higher among small and medium size businesses.

As more people consider a career in tech, there’s a growing need to quickly gain in-demand technical skills.

This is also increasing interest in digital learning, because it’s faster and more affordable than a 4-year college degree.

Income Sharing Agreements (ISAs) would decline

With Income Sharing Agreements, the student agrees to reimburse the cost of tuition after graduation, by paying a percentage of their gross salary (not net salary) once they secure a job with a salary above a specified amount.

These payments continue over several years, or when the reimbursement reaches a cap.

Repayment caps can be around $25K - $30K.

If the student received a living-expenses stipend while attending the class, then the caps can go as high as $40K.

ISAs have been unregulated, and the subject of many lawsuits over the years.

The implementation of consumer protections was overdue, and the federal government is responding.

In September 2021, the Consumer Financial Protection Bureau (CFPB) stated, “The ISA industry has tried to evade oversight by claiming that its products are not loans,” said CFPB Acting Director Dave Uejio. “But regardless of the name on the label, these products are credit and have to comply with federal consumer protections. The ISA industry cannot pretend that core consumer protection laws do not apply to their products.”

In January 2022, the CFPB concluded in its Consent Order that “ISAs are private education loans under the Truth in Lending Act (TILA) ... It updated its examination procedures for private student lending to explicitly reference ISAs.”

In March 2022, the Education Department clarified that “income-share agreements in higher education are private loans. As loan providers, the companies that provide these agreements are regulated in different ways than before the clarification.”

In June 2022, Purdue University paused its Back-a-Boiler ISA program for the 2022-2023 academic year.

In July 2022, the ISA Student Protection Act of 2022 , a bipartisan bill, would create a separate regulatory system tailored to ISAs.

Prior to the federal government’s recent actions, states have also been putting consumer protections in place.

In California, ISAs are regulated as loans.

In New York, schools are not allowed to charge different amounts for the same course.

More states followed.

Depending on the state laws, you’ll find that some schools who offer ISAs will have the stipulation that if you live in one of these states, then you’re not eligible for an ISA.

Why?

In this EDSurge article from March 2022, a former ISA provider states “the lack of legal infrastructure around ISAs leads to difficult collections-related issues. You can't ding somebody's credit score, and there aren't easy legal paths for collecting.” He also cites “Looming regulatory threat” as one of the larger issues that ISA companies face.

Increased scrutiny of bootcamp graduation and job placement rates

As with ISAs, there have been several lawsuits around schools violating for-profit and occupational school regulations designed to curb deceptive and unfair practices and increase protections for students.

There have been allegations of claiming false, misleading job placement rates and starting salaries , and hiding the true nature of the schools’ financial interest in students’ success.

According to VerifiedMarketResearch.com , the coding bootcamp global market size was valued at USD 339.91 million in 2021, and is projected to reach USD 889.37 million by 2030.

Even with a market growing at this pace, there’s no regulatory body holding bootcamps accountable for reporting accurate graduation and job placement rates—other than state Attorney General offices.

So, the statistics that the schools report should be researched by prospective students to ensure they understand how the school is calculating their outcome numbers.

The Council on Integrity in Results Reporting (CIRR) was created in 2016 to provide students with graduation and job placement numbers they can trust.

But CIRR is not a regulatory organization.

Schools can volunteer to provide CIRR with statistics, but it’s not required.

And schools could choose to not report their numbers annually if they had a less than impressive year.

The data that CIRR collects is an attempt to standardize the statistics, so students can compare apples to apples.

Here are the questions from the CIRR website.

• How many graduated on time?
• How many accepted a full-time job in the field for which they trained within six months?
• How many secured part-time jobs?
• Did the school itself hire any graduates?
• How many students’ jobs are in fields outside of what they studied for?
• What are the salaries of grads who started jobs in their field of study?

Why are they asking these specific questions?

Because a school can define “job placement” anyway they want.

If a student takes a web development bootcamp, but gets a job as a financial advisor, is that a successful job placement by the school?

A job can be full-time, part-time, an internship, temporary consulting, freelancing etc.

And all these job types are valid, but what if a student isn’t interested in part-time or freelancing?

Then they should have those details, so they can consider them when choosing if that bootcamp is right for them.

Along with CIRR, several organizations are publishing more articles to help students understand how schools may not be completely up front in their self-reporting.

Career Karma

According to Career Karma, “ The industry as a whole is starting to prioritize transparency .”

Different bootcamps use different criteria when calculating their job placement rate.

Some schools may forgo any distinction between all jobs that their graduates land.

Some may include jobs with an average starting salary of below $40,000 while others may even include jobs outside of the tech industry.

Best Colleges

Unfortunately, some bootcamps manipulate the language they use in order to make their outcomes data seem better.

Course Report

Be sure to ask the bootcamp for data about their alumni. What's the graduation rate? What percentage of graduates are employed within 3 months? What's their average starting salary?

Another common practice in the industry is to select a specific cohort of students that is expected to perform well.

For example, a cohort of students where more than 60% have bachelor’s degrees will be selected to advertise outcomes.

Nucamp publishes authentic, trustworthy graduate outcomes.

Our data is updated daily from our graduate survey responses.

So, you can have clear and fair expectations.

Increase in adoption of Revature model in the US

The Revature model is one where students are trained and then placed in a tech job for a Revature client company.

Revature chooses the client company, the location, and can require candidates to relocate.

The candidate commits to staying in the job for two years.

If the candidate quits before the two-year term, they have to pay a fee of $36,500.

Revature pays their associates’ wages, and the client pays Revature.

Wages are based on the cost-of-living for the location of the job.

The associates do receive pay increases each year.

This model can be attractive to students.

They get tuition-free education and are promised a job after graduation.

Although they give up a certain amount of control, including deciding where they work and where they live for the next two years.

This Talent as a Service (TaaS) model is cost effective for businesses, because they get to outsource the hiring process and all the time and money that goes with it.

They only have to do minimal training to onboard the new hire, and they know they’ll have the position filled for at least two years.

Revature and other TaaS organizations will vet the candidates and send clients the best person for the position they’re looking to fill.

The market for Talent as a Service is expected to reach USD $1.1 billion by 2032, growing from its estimated value of USD $387 million in 2022.

More tech apprenticeships

Tech apprenticeships for entry-level developers are a great way to gain real-world experience and build resumes and project portfolios.

These learn-as-you-earn programs typically involve on-the-job training and mentorships, as well as coursework.

Many organizations, including Fortune 500 companies, have apprenticeship programs.

Several are specifically seeking candidates who received their technical education in a non-traditional way—such as a coding bootcamp instead of a computer science degree.

Nucamp has partnered with Accenture and JP Morgan Chase & Co for bootcamp graduate apprenticeships.

2022 was an eventful year for the tech education industry.

Be on the look-out in January for our predictions for 2023.

Happy eLearning!

And Happy New Year!