How Bloom Institute of Technology is Changing Education System

Lambda School is an edtech company that offers free technology-related courses to students from around the world. The company offers remote courses like android development, data science, full-stack web, iOS development, and UX design.

BloomTech is designed to accelerate your path to a well paying job. We’re so confident in our programs that if graduates don’t get job offers, we pay them through our‍1 10% Tuition Refund Guarantee.

How Bloom Institute of Technology Got Here

  • Formerly called Lambda School, Bloomtech was started by Austen Allred and Ben Nelson after they realized that the current education model was broken.
  • The company, which is valued at more than $150 million has more than 1,000 students who study remotely.
  • Students don’t pay a cent to the school. Instead, they only pay when they get a job.

The Problem Bloom Institute of Technology is Solving

In the United States, the cost of learning has been increasing. This has led to an increase of student debt to more than $1.8 trillion. The average graduate has a student debt of more than $30,000 and most of them struggle to pay it back.

Having all this student debt leads to major challenges to the student. Most of them usually find themselves taking additional loans to service their student debts. Those who don’t find jobs are usually condemned in a vicious cycle of debt and poverty. This is the main problem that Bloom Institute of Technology is solving.

How Bloom Institute of Technology is Solving This Problem

The traditional model of schooling is broken. It goes like this, you enroll to a university, take huge student debt, and study for four years. Bloom Institute of Technology is changing this. The company enrolls students who are interested in learning computer-related courses like android and iOS development, data science, full stack web, and UX design. The students don’t pay a cent for the courses, which take just 9 months.

The demand for these courses is so high, especially in countries like the United States and Europe. Therefore, when the students graduate, there is a high chance that they will get employment. To facilitate this, the company has partnered with leading companies like Amazon, Google, Stripe, Sony, Home Depot, and Cognizant.

The company uses the Income Share Agreement (ISA) in which students pay back the fees after they find high-paying jobs. The monthly payments are based on the amount of money the graduate makes and it stops once the student completes making the payments.

Bloom Institute of Technology Tuition

The school has two types of tuition plans.

Pay Your Tuition Up Front

You will pay upfront in 3 installments. The first installment of $7,317 will be due upon registration. You total cost will be $21,950 total cost. There’s no loan associated with upfront tuition and therefore no interest is accumulated.

Through this plan, if you graduate and don’t get a job paying at least $50,000/year (or $4,166 per month) within 365 days, your tuition is refunded via Bloom Institute of Technology Tuition Refund Guarantee.

Deferred Tuition

This is a learn now, pay later Bloomtech tuition plan. You will pay $0 upfront. Your today deferred payment will be $23,000 plus additional cost, which include 5% origination fee and interest like in a traditional loan.

If you graduate and don’t get a job paying at least $50,000/year (or $4,166 per month) within 365 days, you’ll owe nothing in tuition payments via Bloomtech Tuition Refund Guarantee.

A student is only eligible for the refund if they apply to 10 jobs, network with 10 professionals and post at least 5 GitHub contributions to their public GitHub profile per week, for 46 of the 52 weeks within a year.

How to Qualify for Bloom Institute of Technology Loans (Outcomes-based Loans)

In order to apply for a Bloomtech loan, you need to meet one of the following criteria:

  • Be a U.S. citizen
  • Be a permanent resident or DACA recipient with an established credit history and no outstanding education loan defaults
  • A temporary residents can apply for a loan with a co-signer
  • Be a resident of California

Bloomtech’s Income Share Agreement (ISA)

BloomTech’s Income Share Agreement (ISA) allows you to pay a fraction of your tuition up front to begin your education at BloomTech. Once you graduate and land a job making an annualized $50,000 or more, you begin paying 14% of your salary every month until you reach the ISA cap, hit 48 deferred payments, or hit the total number of payments your ISA is capped at. If you don’t get hired, you never pay more than your down payment.

Bloom Institute of Technology Scholarship

If you are not currently a student at Bloomtech, you can apply for a scholarship if you meet these requirements:

  • Apply during the scholarship application period
  • Be 18 years of age or older during the application period
  • Have a high-school diploma, GED, or equivalent
  • Identify as a member of the following populations: female, Black or African American, Hispanic or Latinx, American Indian, Alaskan Native, or Indigenous, Veteran, additional identities under-represented in tech

Benefits of Bloom Institute of Technology

The Bloom Institute of Technology certificate is good for a number of reasons. First, it is a student-friendly method because the company only makes money when a student graduate. Second, it saves time because the course takes just 9 months, instead of a four-year degree. Third, in general, the course is cheaper than a four-year degree. According to a Lambda School co-founder:

Every school I talk to somehow misses this. If we’re going to make a difference in the lives of everyday people, it can’t be in a scenario where a prospective student has to weigh the risk and try to determine to what extent a school is exaggerating or lying. The economic incentives must be structured so that a student can enter without worrying if their lives will be over should it not work out. Students will happily pay even high dollar amounts if they do end up in a new, high-paying career.Every school I talk to somehow misses this. If we’re going to make a difference in the lives of everyday people, it can’t be in a scenario where a prospective student has to weigh the risk and try to determine to what extent a school is exaggerating or lying. The economic incentives must be structured so that a student can enter without worrying if their lives will be over should it not work out. Students will happily pay even high dollar amounts if they do end up in a new, high-paying career.

What Stage is Bloom Institute of Technology In?

The company is in the early stage of existence and is seeing incredible growth. The company has more than 1000 students from around the world. Each new cohort starts every five months, which means that in a year, the company educates more than 2000 students. According to a Bloom Institute of Technology investor:

Instead of investing in overlooked and underestimated companies, Bloom Institute of Technology invests in overlooked and underestimated people.

Bloom Institute of Technology Funding

Bloom Institute of Technology has raised millions of dollars from investors such as:

  • Bedrock Capital
  • Google Ventures
  • GGV Capital
  • Geoff Lewis
  • Y Combinator

Related Companies

Bloom Institute of Technology is not the only company looking to change the industry. Other companies in the sector are:

Summary

Bloom Institute of Technology is aiming to disrupt the education system by creating a model in which students pay no fee. If successful, the model could change the world. However, as shown, the company is in a young and highly-competitive industry.

More Information

Kasper is our expert for saving, investing and bank accounts. Kasper holds an MSc in Mathematics and worked with Mercedes-Benz and the Dutch tax authorities. Read more about Kasper and the whole editorial team at FiFi and our editorial guidelines.