Paypal Co-founder New Lending Startup Affirm Gets Into Student Loans For Coding Bootcamps
TechCrunch: Affirm, the lending startup co-founded by Max Levchin, is breaking into student loans for coding, design and business bootcamps from General Assembly, Bloc, Kaplan’s Dev Bootcamp and Metis. The company, which raised $275M this past spring, is branching out from its initial market in online retail. They were originally financing purchases at the point-of-sale online with e-commerce companies like mattress retailer Casper.
Now they’re partnering with these bootcamps to offer 12, 15 or 18-month loans with interest rates that range from 6% to 20%. Students don’t need to start repayment until 6 months after they take the loan out so they can take courses and look for jobs. Affirm’s model, which can offer loans quickly based off a borrower’s name, phone number, birthday and the last 4 digits of their social security number.
“There’s this desire to improve your social standing. But the living wages in this country have been flat and access to credit is one way to improve your quality of life,” Levchin said. “You can argue about the consumption side of debt, but one thing that you can borrow for to improve your standing is education. It is the best kind of debt. It’s the most righteous reason to borrow money.”
Coding bootcamps, or these short 10-week to several month long courses in software development, have blown up over the last few years. Total course revenue for these camps may ramp up to north of $170 million this year with more than 16,000 students, according to Course Report. Their average cost is around $9,900, but that can rise to nearly $20,000 for some of the more expensive providers.