OP here, also happen to be a YC founder (S17 -
https://lambdaschool.com). Shocked to see this on HN.
A lot of people are asking me about number 7:
> 7. We had one student on the edge of homelessness, was $400 short on bills and almost had to quit because of that. I personally loaned him the money, and his income moved from $10/hr to $70k+/yr. It only took $400, but he didn’t have anywhere to get that from. Insane.
We train people to be software engineers for free in exchange for a portion of their future income for two years (we only get paid if they make above a certain salary threshold doing what we train them to, otherwise we don't get paid). So as a school we focus on eliminating the risk and upfront cost to the student, which lets many brilliant people access a world-class education who otherwise might not afford to. We're also incentivized to make the perfect school that will cause you to be successful in your career, and those incentives make an enormous difference.
The average stats from our first classes are remarkable: our average student increased his or her annual income by over $40,000/yr, 50% were hired within weeks, and the median salary was $90,000, including a lot of low-cost-of-living areas.
Since we're paying for all the other costs of running a world-class school without upfront revenue (we're spending over $300,000/month all-in right now), we're not in the place to pay for living expenses as well, and currently students need to cover their own living expenses for six months. Usually they can live with family, some have part-time jobs, we do have a part-time program, etc. but it's never easy.
This kind of small discrepancy forcing people to quit is something we see all. the. time. I probably see a similar situation with different small dollar amounts weekly. There are times when I am fairly confident I can swing someone's future earning power by several million dollars, but I don't have the thousand dollars it takes to do that. It's incredibly frustrating.
We can partner with lending companies, but if they're paying for students' living expenses they also require students to pay their tuition upfront and be saddled with debt, which goes against our mission, and we think there has to be a better way.
I'm looking into raising some sort of non-profit, living-expenses-only fund/endowment to lend during these sorts of shortfalls, but I'm new to raising nonprofit dollars. If anyone has any suggestions I'm happy to hear them. I don't have a good sense of what the interest rates would need to be for this to work in a for-profit world, so we'll see.