Business
3:56 am
Mon March 24, 2014

High-Tech Training Programs Try Deferred Payment System

Originally published on Mon March 24, 2014 10:25 am

Transcript

DAVID GREENE, HOST:

There are plenty of open jobs in the U.S. tech industry, but companies are struggling to find qualified people, even with so many Americans out of work right now. A number of private job training programs have popped up to capitalize on the opportunity here. The problem is, many of the programs cost tens of thousands of dollars, making it harder to diversify that industry.

Alex Schmidt reports on one man's vision to eliminate that barrier.

ALEX SCHMIDT, BYLINE: For years, Gregorio Rojas complained to his wife. The senior software developer was annoyed that he never got female, Latino or other minority candidates applying to his open software developer jobs. Then finally, one day...

GREGORIO ROJAS: She just told me, look, why don't you just go do what you've been talking about doing and just go do it.

SCHMIDT: So, six months ago, Rojas welcomed his first class, and now, students are wrapping up their training.

ROJAS: I would start by extracting it, right?

UNIDENTIFIED WOMAN: OK. So...

SCHMIDT: This a 20-week long software engineering program based in Los Angeles, geared specifically to women and minorities. Rojas calls it Sabio, which is the Spanish word for wise. The inaugural class is really small, with just four graduates. But that was important in part because Rojas is trying an experimental deferred payment model. None of the students shelled out a dime upfront.

ROJAS: In 20 weeks, you're going to have a great paying job. In 20 weeks, you're going to be able to start making those payments that you couldn't make 20 weeks beforehand. And so we consider that to be a really empowering aspect of the program.

First things first.

UNIDENTIFIED WOMAN: (Unintelligible)

ROJAS: OK. Like get the view right...

SCHMIDT: Among the students is Kevin Reevers, who is staring at his laptop intently. He graduated from Morehouse College a few years back but wasn't able to find a job in marketing. Reevers has a load of debt, and he would've liked to pay for Rojas's program upfront...

KEVIN REEVERS: I would've if I could, but unfortunately, I did not have the means to. So this was an opportune moment for me to take advantage of.

CHRIS KING: I think we're new at getting the innovative private sector kinds of ideas into the whole realm of workforce development skills building.

SCHMIDT: Chris King is a professor of Human Resources at the University of Texas at Austin. He says one of the challenges for entrepreneurs is that careers don't happen overnight.

KING: One of the things that people miss is that the rate of return on training really is as good as the long-term returns in the stock market. We just don't acknowledge it or respond to it very well.

SCHMIDT: In San Francisco, another start-up is making that bet. App Academy had the same deferred payment idea, only it's been around about two years longer than Sabio. Kush Patel is the founder.

KUSH PATEL: We turned a profit pretty quickly so we were happy about that, especially since our tuition model is a bit difficult to manage cash flow with that because we don't collect tuition on students until they have a job, but we're there and we're pretty happy that we've been able to achieve that.

SCHMIDT: App Academy has placed 97 percent of graduates in software jobs, and they've grown from 20 students in the first class, to 250 in the second. So far, of Sabio's students, two have jobs, and the others are in final stages of interviews.

Experts caution against holding these programs up as models until they have strong track records of job placement over many years.

For Gregorio Rojas, placing his students in good jobs is about more than numbers. He tears up when he talks about the program.

ROJAS: We're very excited and we're happy to be able to tell people - because they look at you crazy. I mean people look at you crazy. You can become a software developer in 20 weeks, you can get into a high paying job in 20 weeks? Yes, you can.

SCHMIDT: Rojas believes the 10 grand Sabio costs will not be difficult for students to pay back. But unlike the App Academy founders, he's not independently wealthy. He's been holding down a day job while he waits for students to get hired, and it's just too difficult. So for the next class, he'll be asking for payment upfront. He knows that will put the program out of reach for quite a few people.

ROJAS: We are leaving people out. We can't deny that. And that's the worst part of what we're doing. But we're going to get there.

SCHMIDT: By get there, Rojas means saving enough capital so that he can go back to the deferred payment model, and make a real long-term investment in his students' careers.

For NPR News, I'm Alex Schmidt in Los Angeles. Transcript provided by NPR, Copyright NPR.