How Sabio’s New Income Share Agreement Works

Sabio launched their coding bootcamp on a 'pay-for-performance' model in 2013, but found it wasn’t sustainable. In 2019, with the advent of the income share agreement marketplace, Sabio is once again able to offer a pay-once-you-land-a-job option for its part-time and full-time coding bootcamps in California. Sabio co-founder and CEO Liliana Monge tells us about the ISA terms and eligibility requirements, how students can combine the Sabio ISA with scholarships and GI Bill funding, and how Sabio’s career services team supports grads in the job hunt.

Sabio’s Income Share Agreement Terms:

• Payments begin 3 months after leaving the program and only if a grad is making a minimum of $55,000 per year. If a student is making under the threshold, they aren’t required to make payments.

• Students pay 13% of their monthly income over a maximum of 48 monthly payments.

• Payments are capped at 1.5x of the standard tuition amount.

• Payments end after 48 months regardless of what the student has paid during that time.

Liliana, what is your role at Sabio? 

I am one of the cofounders of Sabio Coding Bootcamp. I've been leading the charge these past six years to have these creative and innovative financial opportunities for our students. 

What financing did Sabio offer before the launch of the new ISA?

We launched Sabio in the summer of 2013 with a Paid for Performance model. The first people that came through our initial cohort in Los Angeles had a contract with us. We trained them but they were not obligated to make any type of payment to Sabio until they were tech professionals. That worked out really well. We had an amazing cohort and everyone got offered tech jobs. 

Back then, there weren't any financial players who were helping us finance these Pay for Performance contracts. We eventually had to go the general financing route that everyone then became familiar with, through partners like Ascent Funding and Sallie Mae. Fast forward to the present day, and we have a working relationship with Edly to once again offer an Income Share Agreement (ISA) for students that are interested in training with Sabio. Edly is working to launch a marketplace that allows us to offer the ISA and help us finance as many students as possible

Why does Sabio need an ISA program along with your other financing options?

My belief as a coding bootcamp operator is that I owe two responsibilities to my students. Number one is to provide students with exceptional instruction and the exact skills they need to successfully launch a career in tech. Number two is to give our students as many different options as possible for financing their training.

We want to attract as many smart and highly motivated individuals to our organization as possible. In order to do that, we have to provide our students with as many options as we can. We've offered scholarships in partnership with the Department of Labor and our own Women in Tech Scholarships. We secured financing so that Veterans can use their education benefits at Sabio and we've worked with the Department of Defense so that active-duty military can train with us. I see this addition of the ISA as another option for people that want to come and train with us.

Where is the ISA available?

The ISA will be available for all of our campuses and programs, and for remote students. It is available for full-time students and part-time students. We're launching the ISA with our signature program first, which is Full Stack Web Development.

Who is the ideal student for the Sabio income share agreement?

Over these past six years that we've been running coding bootcamps we've seen many different types of people come to us for a host of reasons to do tech training. But the ISA was designed for people who want to switch careers into software engineering, want to be creating software on a daily basis, and want to be technical professionals for the long term. 

Is the admissions process for the full stack bootcamp different for someone applying for the ISA versus someone who is paying upfront tuition?

Our process is the same for everyone. Whether you are a Veteran, going for a scholarship, or paying upfront, the number one thing we want to know is whether you can successfully complete the Sabio Prework class. We are pretty flexible about how you decide to pay for the training. You have to come in, finish prework, and complete an assessment successfully. Once you go through that we discuss payment methods with you to find the financing vehicle that will work best for you. 

What are the eligibility requirements to get a Sabio ISA?

• There is no minimum income or credit score. There are a couple of 'Credit Knockouts' meaning that if the student has defaulted on a student loan previously or filed for personal bankruptcy they would not qualify.

• You have to be 18 years or older and either a US Citizen or a Permanent Resident of the US. 

What are the terms of the Sabio ISA?

We've been able to, in my opinion, offer the most favorable ISA currently on the market.

• The ISA does not kick in until a graduate is earning the minimum income threshold which is $55,000. 

• If a student graduates and they are making over $55,000, the ISA is 13% of their wages. 

• The payment period is 48 months. If at any point during that 48 month period a graduate isn’t working or they are making less than $55,000, no payments are required. 

• The payment cap is 1.5 times tuition which is traditional for an ISA. Our tuition is currently $15,000 which is right at the market value. The max they will ever pay with the current tuition cost is $22,500.

We use a partner, Vemo, to help administer those payments. 

What happens if a student doesn't find a job?

If they're not working, no payments are due. Every month they are asked about their employment. Let's say a student graduates, hates coding, never wants to do coding, and they become an actress. Let's say that the student is only making $40,000 per year as an actress. That student won't have to make payments. It is only if they have graduated from the program and they are making more than $55,000 that a payment is due.

If 48 months elapses and they've never had a job earning more than $55,000 a year then they don't pay anything?

Correct. Exactly. 

How do you help students who are actively looking for work?

At Sabio, we have extensive job assistance programs. We host Meetups that help alumni with networking. We offer alumni rooms with an open-door policy at all of our campuses as well as a library of job search resources for our alumni. We're engaged with our alumni and help them to make sure they are actively looking for work.

Can you give me some examples of jobs you might expect a graduate to get where they would make $55,000 or more and be required to pay back their ISA?

We do an annual report for the state of California because we have a license through the state. We have found that our students on average are earning starting salaries of $72,500 per year. About 80% of the people who graduate from our program are getting paid a full-time wage to code for a living. We expect people to come through the program and become Software Developers, Software Engineers, Front End Developers, or Back End Developers. It's jobs in tech that will pay you those higher wages. 

Do you help students with salary negotiations during your program?

Yes. When students get close to getting a job offer during the interview process we encourage them to share their offers with us. We help them negotiate offers. With 700 graduates in Southern California, we know what the market value is. We will be frank with students and help them understand their value. That applies to all students. From those who are going to work for a large corporation, to students who are going to take freelance roles. We will help people negotiate their first, second, and third job offers. Our commitment to our students is long term. 

Does Sabio offer partial income share agreements?

Yes. You could get a Woman in Tech scholarship and combine that with a smaller ISA. You could use the last portion of your veteran benefits and get a smaller ISA. Some people also may want to use an ISA and then maybe take out a loan of $5,000 for living costs using Ascent Funding. There are lots of ways that students can combine our financing options to find a solution that will work for their individual needs.

How do you give advice to students advice about those financial options?

Twice a week I host an hour-long video chat information session. I share all of the websites for our financing partners then I give prospective students an idea of what it will look like to use each option. I go over what monthly payments for financing the full tuition will look like, how you can combine financing options, what ISA payments would look like, etc. I can help answer any questions as well. I'm always available to prospective students to schedule a consultation to go over the options and put together a plan that works for them.

What is your advice for students choosing between an income share agreement versus a loan?

It really depends on a student's current obligations. A person might already have student loans and have sufficient income to cover their current loan payment obligations. But if they borrow through Ascent Funding or Sallie Mae they will have a monthly payment that does not allow for another payment. For those students, an ISA might be a great solution. With the ISA you make no payments while you’re training and during a 3-month grace period. It is important to do an analysis of a student's current obligations to find out which payment plan would work best for them.

Students need to have time to take a breath, draw out a couple of options, and not think that any single financial instrument is the end all and be all. Every person has their own unique financial profile and they should explore a couple of options. At the end of the day you need to go to a school that will provide exceptional instruction, that is a good fit for you, and that is going to be there to support you in the job search. Once you find that school, then go through and figure out how you are going to pay for that specific school. 

Find out more and read Sabio reviews on Course Report. This article was produced by the Course Report team in partnership with Sabio.