u/cglee wrote (the comment Michael replied to):
Here's a way it can work and probably how most of higher ed works: * First, attract students with marketing. * Next, find bank to buy contract. Eg, bootcamp fee is $25k, then bank buys it at $18k. Student owes bank $25k. Assume it costs bootcamp $15k/student all-in, so bootcamp
u/michaelnovati replied ·
This is how it worked since the Lambda School days.
The banks backing those are all tiny regional and local banks trying to expand their interests. Maybe to look larger and innovative in support of getting acquired? Maybe as an effort to get some capital to survive?
If the bank isn't doing well (or is doing really well) and gets acquired by a large bank, the large bank reviews these deals and says 'hmmmm'.
Banks move slowly so kind of like CIRR, it takes a while to realize the reality. Most recent CIRR reports don't look so bad.... but things tanked in 2023 and when the banks catchup, we'll see if they continue to back the remaining providers.