Financial aid for coding boot camps is a terrible idea.

Great. The Government Found Something New to Ruin With Student Loans.

Great. The Government Found Something New to Ruin With Student Loans.

Moneybox
A blog about business and economics.
Oct. 16 2015 8:15 AM

Great. Now Washington Wants to Ruin Coding Boot Camps.

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Damnit, Arne. (Arne Duncan, outgoing U.S. secretary of education).

Photo by Alex Wong/Getty Images

Coding boot camps are one of the more promising newish innovations in the world of higher education. In just a few months, they purport to teach students without a tech background all the necessary skills to become a professional programmer. The schools emerged to feed Silicon Valley's constant hunger for developer talent, and while some of the tantalizing job-placement rates they advertise might not be entirely trustworthy, the consensus seems to be that they really are filling a gap in the market for high-end vocational training and are helping many grads transition into new careers.

Jordan Weissmann Jordan Weissmann

Jordan Weissmann is Slate’s senior business and economics correspondent.

One of the most promising things about the boot camps is that they've cropped up outside the federal financial aid system. Because the schools aren't accredited like a typical college or university, attendees aren't eligible for student loans or Pell grants. As a result, there's no temptation for the programs to charge outrageous tuition just to collect more government-aid money, the way so many for-profit colleges do. Code academies are still expensive, mind you—last year, the Wall Street Journal reported that prices ranged anywhere from $6,000 to about $18,000—but they aren't parasites feeding off the public.

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Unfortunately, the government looks poised to storm in and potentially ruin what up until now has seemed like a pretty happy free-market experiment. This week, the Department of Education announced a new pilot project that would make students enrolled at some boot camps—as well as other alternative education options like massive open online courses (aka MOOCs)—eligible for federal financial aid, including student loans. The programs would have to be offered in partnership with an accredited college or university, and overseen by an independent "quality assurance entity" charged with making sure students are actually learning, graduating, or getting jobs. 

It's a well-meaning plan intended to make options like boot camps more accessible to low-income students. But the pilot raises a few obvious concerns. The first is that the smell of federal-aid dollars will draw shoddier for-profit educators into the boot-camp business. (Full disclosure: Kaplan, the for-profit college operator owned by Slate's parent company, Graham Holdings Co., purchased Dev Bootcamp, a major code academy, last year. Clearly, there's already corporate interest in the space.) As Alexander Holt writes at EdCentral, "What starts as expanding access ends with bad actors taking advantage of federal dollars with no strings attached." Theoretically, the quality assurance entities are designed to stop that from happening—as outlined by the Department of Education, they would actually have stricter standards than the accreditors that currently bless colleges with financial-aid eligibility. But will that work out in practice? Who knows.

It's also not clear that coding boot camps are right for your typical low-income student. Right now, the programs cater to four-year college graduates with the resources to pay the tuition. That's a self-selecting group, which likely boosts graduation and job-finding rates from these programs. Their results might be less impressive if high schoolers suddenly start borrowing to attend.

Meanwhile, funneling aid to boot camps could just make them more expensive in the end. Though the research isn't conclusive, there is some strong evidence that the availability of federal student loans and Pell grants has led some colleges, especially in the for-profit space, to raise tuition. And there is no special reason to assume that won't happen to code schools. Even if federal subsidies don't drive prices up, they could discourage schools from finding ways to make themselves more affordable without the help of aid.

Again, this is just a pilot program. If the results stink, it's possible the government will drop the idea. But given the problems that federal aid can bring, it seems premature to shower it on a young, interesting, but not-yet-proven corner of the higher-ed world. Why mess with a pretty good thing?