Coding bootcamps received a major boost from Uncle Sam on Tuesday when the Department of Education announced the launch of a program that will allow them to accept federal student aid for the first time.

Until now, students eligible for financial aid have been unable to use those funds to pay for alternative higher education programs such as coding bootcamps, which teach a range of software development skills. But under the department's Educational Quality through Innovation Partnerships initiative (EQUIP), four select bootcamps from around the country may accept federal student aid. Through EQUIP, these schools will partner with traditional universities to provide training to students from low-income backgrounds.

The program is a major step forward for coding bootcamps, a new breed of venture-backed, for-profit schools that have begun popping up over the past couple of years with the promise of turning students into software engineers over a matter of weeks.

"The EQUIP program recognizes that coding bootcamps, when done right, offer a great education alternative pathway," says Melanie Augustin, head of school at Delaware's Zip Code Wilmington, one of the four chosen bootcamps.

The average tuition of coding bootcamps is nearly $11,500, according to Course Report, a website that provides reviews for the 91 in-person schools in the U.S. and Canada. Course Report forecasts that bootcamps will graduate nearly 18,000 students in 2016, up nearly 75 percent from last year.

In total, eight sets of universities and non-traditional programs were accepted into EQUIP. Four of those involve coding bootcamps. The list comprises MakerSquare, which is paired with the University of Texas; The Flatiron School and SUNY Empire State College in New York; Epicodus and Marylhurst University in Oregon; and Zip Code Wilmington and Wilmington University in Delaware. The coding bootcamps' EQUIP programs are expected to start during the 2016-17 school year, a U.S. Department of Education spokesman says.

To select its programs, the Department of Education said in October it would look for schools that were innovative, prioritized diversity, offered a rigorous quality assurance process, had affordable tuition, and proposed strong student and taxpayer protections.

"We're hopeful EQUIP will help us expand to serve more low-income students," says Michael Kaiser-Nyman, the founder of Epicodus. "Many people can't consider a higher education opportunity that can't accept federal financial aid."

Federal student aid is distributed through colleges and universities, but the Higher Education Act prevents schools from receiving aid for programs where more than half the content is given "by an ineligible entity," such as a coding bootcamp. The EQUIP program makes it possible for the chosen universities and their partner programs to exceed that 50 percent cap. In its first year, EQUIP programs will enroll a total of about 1,500 students, a spokesman for the Department of Education says.

The Obama administration hopes the program will help ensure that the eye-catching outcomes trumpeted by some of the players in the market are backed up. Many schools include lofty marketing material on their websites promising job placement rates for graduates as high as 99 percent, with average jobs that pay six-figure salaries, but the schools often omit their students' actual completion rates.

All EQUIP schools will be paired with third parties tasked with providing quality assurance. Among them is HackerRank, a Silicon Valley company that specializes in measuring the skills of software engineers.

"One of the biggest concerns with these unaccredited institutions has been a lack of transparency. No one really audits their results," says Vivek Ravisankar, HackerRank's CEO and co-founder. "With EQUIP, the government is testing the hypothesis that--when coupled with a quality assurance entity and an accredited university--bootcamps can be a legitimate, affordable, and faster way of getting education."

HackerRank will work with Zip Code Wilmington, which is one of the few nonprofit coding bootcamps. The company will measure the quality of the coding bootcamps' educational offerings by having students undergo biweekly assessments as well as one at the end of the 12-week program. Students will be benchmarked against other coders, and the assessments will be used to ensure students meet a minimum competency level.

The announcement of the four EQUIP-approved coding bootcamps was well received among other coding bootcamps, which say that the move brings more legitimacy to the blossoming market.

"If the federal government gives a coding bootcamp a seal of approval, that is huge for consumer confidence," says Liliana Aide Monge, co-founder and CEO of Sabio.la, a bootcamp with locations in Southern California. Depending on the effectiveness of the EQUIP pilot program, the Department of Education may decide to allow more coding bootcamps to accept federal student aid.

The announcement also got a warm welcome from tech diversity advocates, who say that the federal program will make it easier for minorities and students from low-income backgrounds to make their way into the tech industry.

"It's exciting to see new opportunities opening up for more people to access tech education," says Melinda Briana Epler, co-founder of Tech Inclusion. "While coding schools and bootcamps have helped fill the opportunity gap in tech, many people still have not been able to afford the opportunity. This is a promising step."

Published on: Aug 17, 2016