Financial Aid Now Pays for Coding Bootcamps and MOOCs

In a nod to the popularity and necessity of such offerings, the government will expand access to this specialized training.

A new program will let some students use federal aid to pay for computer-coding bootcamps.  (Alessia D'Urso/Flickr)

The Education Department on Wednesday unveiled a pilot program that will allow some students to use federal financial-aid dollars to pay for short-term certificate programs and massively open online courses (MOOCs). As some form of higher education becomes an increasingly critical job requirement, these courses are becoming more popular, particularly among students who do not have the time or resources to pursue a rigid four-year degree.

According to Course Report figures cited by the department, coding bootcamps are expected to graduate more than 16,000 students in 2015, up from 6,740 last year. But because many of these programs are not traditionally accredited, students have been barred from using federal financial aid to pay for them. As the department noted in its announcement of the pilot program, “Little [federal aid] is eligible to go to low-income students seeking to attend nontraditional or noncredit programs that may be a better fit for them.”

Money isn’t the only issue. The programs aren’t overseen by standard accrediting agencies because it can be difficult to assess their quality.

But that doesn’t mean that such programs can’t offer a viable path to a successful career. As Georgetown University’s Center for Education and the Workforce noted in a 2012 report on nondegree programs, certificates can be the most cost-effective means of obtaining higher education because they typically take just a year or two to complete. What’s more, the payoff is sometimes higher for a certificate program than a four-year degree.

On average, a man who earns a certificate will earn more than 40 percent of men with associate’s degrees and 24 percent of men with bachelor’s degrees. (The figures are slightly lower for women.) Men who hold computer/information services certificates earn an average of $72,498 a year, which is higher than 72 percent of men with an associate’s degree and 54 percent of men with a bachelor’s degree.

With that in mind, the administration has created what it’s dubbing the EQUIP (Educational Quality Through Innovative Partnerships) program. Essentially, the program will give colleges that offer financial aid the ability to partner with nontraditional providers. Right now, colleges are largely prevented from partnering with such organizations. The pilot program will waive the restrictions that prevent such partnerships and let the Education Department begin to evaluate how well nontraditional programs serve students and whether they help students find good jobs.

The idea has some people concerned, though. Robert Shireman, who served as deputy undersecretary in the Education Department and who now works as a senior fellow at the left-leaning Century Foundation, wrote in September about coding bootcamps: “It is worth remembering that the for-profit college scandal, which is still in the process of being cleaned up, began as a noble effort to allow companies to gain access to federal funds only if they ran innovative training programs that led to good jobs. We must be careful that, in opening federal aid to coding boot camps, we do not let that happen again.” Shireman also noted that opening access to federal aid could prompt unscrupulous actors simply looking to make money to get into the field.

It will be up to a college’s accrediting agency to determine whether partner programs fall within a school’s accreditation. Third-party quality-assurance entities will be charged with evaluating how well the programs perform.

Judith Eaton, president of the Council for Higher Education Accreditation, an association representing 3,000 colleges and universities that recognizes 60 accrediting organizations, wrote in an email to Next America that the program will be “a challenge” to implement.

“Regarding the experimental-sites pilot programs, the establishment of ‘Quality Assurance Entities’ will be a challenge to current accreditation—as these could be a new type of quality-review body to which the federal government is turning—unprecedented for many decades,” Eaton wrote. “It’s an opportunity for accreditation as well: The partnerships would be with institutions that are already accredited and in Title IV and current accrediting organizations could seek to serve as an ‘entity’ under certain conditions.”

The department will specifically be looking at whether these partnerships expand higher-education access for low-income students of color, and they'll be looking at student outcomes, things like employment and earnings. The administration has for several years sought to tie student outcomes to college rankings and access to federal dollars, but schools have successfully resisted.

As a pilot process, the initial scope of EQUIP will be limited, and it’s impossible to know exactly how the partnerships will look. MOOCs often enroll more than 40,000 students, but smaller certificate programs sometimes serve just a few dozen. How much aid students receive will vary, and since pilot participants have not yet been selected, the average cost is impossible to determine. The Georgetown report noted that some options cost a few thousand dollars while others cost nearly $20,000. The department will be looking at proposals that allow students to access Pell grants, awards specifically for low-income students that this year max out just shy of $6,000, or direct subsidized and unsubsidized loans, which vary depending on need.

The department’s goals in announcing the program are part of a broader effort to help students who, for a variety of reasons, choose not to or cannot attend a four-year college. Over the last several years, the department has moved to expand access to Pell grants for low-income students and touted competency-based education, the idea that students with work experience or military service should receive credit for skills they have gleaned on the job. As Shireman lays out in his post, there are valid concerns and questions about how to expand access to quality higher education, and much of the burden will fall to accreditors who have little experience evaluating nontraditional programs. But as the demographics and needs of the nation’s students evolve, innovation, however messy, is required.