An Update on BloomTech and ISAs in California [Updated]
UPDATE: Bloom Institute of Technology (formerly known as Lambda School) has been officially approved by the BPPE. Read more about this exciting update here.
For the past year the BloomTech team has been working towards a major goal: becoming the first school in California approved to offer Income Share Agreements (ISAs) by the California Bureau for Private Postsecondary Education (BPPE). At a time when unemployment in California is reaching historic levels and health concerns restrict access to learning and to work, we believe BloomTech’s model of online instruction and educational financing expands educational access to students who would otherwise be excluded and increases economic opportunities to find higher paying jobs.
Earlier this week, we learned our latest submission to the BPPE was not accepted. This is the latest step in a long process, and so while it’s not the decision we hoped for or expected, this process is far from over. There will be no interruption to operations or support for students in California and school will continue as normal. We’re committed to working directly with BPPE to solve the issues they raised.
The good news is that the BPPE’s response had nothing to do with the quality of our programs, our educational model, or anything related to the school itself. The decision was entirely related to the way we help students pay for their education using Income Share Agreements (ISAs).
At BloomTech, we invest in you. With our popular income share agreement, or ISA, you invest in yourself, too. When you pay for your BloomTech education with an ISA, you’ll start by paying for a fraction of your tuition up front. Once you graduate, we’ll help you land a well-paying job—and then you’ll pay for the rest of your tuition with a percentage of your income for a limited time.
In other words, an ISA funds your tuition so you can pay back BloomTech later.
Here are some of the basics about ISAs at BloomTech.
- Know what you owe. Unlike with a typical loan, the maximum amount you owe will never increase with an ISA. Your total payment amount is capped at $40,000*, and you may end up paying less.
- It scales with you. Your goal is to get a great job; that’s our goal for you, too. Once you start earning at least an annualized $50,000** a year, you’ll pay us back with a percentage of your income each month. If your earned income falls below the minimum total amount, your payments will be deferred until your income reaches the minimum again.
- No lingering obligations. Your contract is finished once you complete the ISA payment schedule or reach the payment cap, whichever comes first. And if you aren’t making the minimum average monthly income, and have had deferred payments for a total of 48 months, then your ISA expires and you don’t owe anything else—even if you’ve paid nothing up to that point.
At BloomTech, we are committed to providing more people with a direct and lower-risk path to a rewarding tech job. That’s why we offer flexible options to pay your tuition—and launch your new career.
The vast majority of our students choose the BloomTech ISA and so pay us little to nothing up front. We bet on the success of our students. When students succeed, we succeed. If our students fail, we fail. We did a poll of our students six months ago — 93% said they would not have attended BloomTech if the ISA wasn’t an option. Fundamentally, ISAs make BloomTech accessible to students looking to transform their lives.
We wanted to share this publicly because this is much bigger than just BloomTech.
ISAs are a groundbreaking idea that mitigate financial risk for students, lessen the upfront burden of enrolling, and align the incentives of school and student. Beyond online schools like us, traditional institutions like Purdue and University of California San Diego Extension offer ISA options as an alternative to traditional student loans.
Ultimately, if ISAs are to become a truly sustainable, durable, and scalable financing option for the broader educational landscape to adopt, ISAs need regulation.
By working with regulators head-on and advocating for legislation on the federal level, we’ve made our position very clear: we want widespread ISA regulation. ISAs have too long existed in a legal gray zone, and approval would set a crucial precedent for better student protection, broader adoption, and greater access to education. That’s why we’re pushing so hard.
Access to education and a path to a better career is quite literally life-changing. It’s the core of what we do every single day. We believe in a future in which ISAs are a consumer-friendly, ubiquitous option for all students. We’re not going to stop working to make that happen.