Make School Rewrites the Rules of Student Debt With First-of-a-Kind Tuition Funding Model

Share Article

School of the Future Embraces Friedman’s ISA Concept as Nation’s First Institution to Offer Tuition Financing Exclusively Via Investments in Graduates’ Future Earning Prospects

We’ve spent the past few years validating our innovative educational pedagogy by creating an environment where students are passionate about learning and graduate into jobs at Google, Facebook and top Silicon Valley startups.

Make School, the school of the future combining purpose, autonomy and mastery in technology and products, has secured a $2 million facility by Goal Structured Solutions (GS2) to offer income share agreements (ISAs) to help students attending the school’s Product College pay for their education without the burden of unnecessary debt and high-interest private loans. Make School becomes the first institute of higher education in the nation to exclusively offer tuition financing through a model that allows students who choose not to pay upfront to give a share of their future earning prospects instead.

Make School’s ISA program is powered by Vemo Education, the education technology firm that designs, implements, and services income-based financing programs for higher education. Notably, Make School is also the first venture-backed institution to embrace ISAs for its tuition-funding framework.

Make School, where the equity-based funding model will be offered to all students, is among the first to fully realize the original vision of ISAs. The program will allow students to attend Make School without paying upfront tuition or taking on student loan debt. Upon graduation, learners who participate in the ISA program will pay a percentage of their earnings for a fixed period of time. All students accepted for admissions at Make School will be eligible to fund their entire education through the ISA program. In addition to covering the cost of tuition, students who choose to participate in the program are also eligible for a $1,500 monthly stipend to cover living expenses based on financial need.

“This partnership demonstrates investor confidence in our success pioneering the ISA model for higher education,” said Ashu Desai, founder of Make School. “We’ve spent the past few years validating our innovative educational pedagogy by creating an environment where students are passionate about learning and graduate into jobs at Google, Facebook and top Silicon Valley startups. Investor funding of ISAs enables us to scale our model and build a top caliber institution of higher education without need for government funding or student debt. We hope to inspire other institutions to adopt this approach at a time our country is under tremendous pressure to solve the student debt crisis while also producing highly skilled job candidates to fill the talent gap in technology and science.”

Income share agreements allow institutions to demonstrate their commitment to student success by sharing risk with their students. Unlike student loans, ISAs have no principal balance or interest, and payments adjust based on a student’s income -- reducing the burden if a student makes less income than expected.

This allows the originator of the funds to get back more than its initial investment from successful graduates, while mitigating failure to recoup the investment due to default or unsuccessful job performance. Make School assumes all financial risk, and the program radically incentivizes the alignment of priorities between Make School, its students and the hiring companies while decreasing student dependence on government funding and high-interest private loans.

“Income share agreements align the interests of students and education providers, by ensuring that schools succeed when their graduates do,” said Tonio DeSorrento, co-founder and CEO of Vemo Education. “We’re proud to support Make School’s innovative vision and deep commitment to student success.”

The concept of income share agreements was first advanced by famed American economist and Nobel Prize winner Milton Friedman, yet has never been fully implemented in higher education until now. Renewed interest in equity-based funding models has emerged in recent years around legislation in Oregon for tuition-free college and discussion among prominent think tanks and policymakers.

Ken Ruggiero, chairman and CEO at Goal Structured Solutions, commented, “It is GS2’s vision to revolutionize the way families pay for school. In partnering with Make School the interests of the school, the student and the capital provider are all aligned and focused on successful completion and ultimate job placement of the student.”

The partnership with GS2 and Vemo Education underscores the mission of Make School to offer debt-free computer science education. The school’s Product College has been offering similar funding to some students since it opened its doors three years ago. Funded by Learn Capital, Mitch Kapor, Y Combinator, Alexis Ohanian, Tim Draper, Andreessen Horowitz and other tech industry leaders, Make School helps students learn how to build apps and websites that improve the lives of others with graduates going on to work at top technology companies such as Google, LinkedIn, Pandora, and Snap.

About Make School
Make School is redefining computer science education, emphasizing project-based learning through its Product College and Summer Academy. Based in San Francisco with multiple locations across the U.S. and Asia, Make School is changing the way future founders and developers learn. Students build products they’re passionate about, while networking with other talented students and tech-industry professionals. Alumni have studied computer science at Stanford, MIT, Harvard, UC Berkeley and have gone to work at Apple, Google, Facebook, Tesla and other top global technology firms.

Notes for editors:

  • Make School is not a coding bootcamp, which typically conduct accelerated 12-week programs. Make School conducts its program over a two-year period in which students attend the school for nine months, leave for an internship, and then return for an additional nine months of instruction.
  • The nature of ISAs provides that if students aren’t earning, they don’t have to pay. Students have a choice between paying upfront for their tuition or entering into an ISA agreement in which a portion of their salary in the first few years after they get a job is paid to the school. A minimum annual salary threshold of $60,000 must be met before repayment is required, and if students earn less at any time, repayment is paused. There is also a cap on the amount that has to be repaid.
  • The explosion in student debt has been described as a time bomb threatening to blow up the U.S. economy. The outstanding balance of the nation’s student loans is growing by an estimated $2,726.27 every second according to StartClass. Total student debt has reached a staggering $1.4 trillion, tearing at the fabric of society as borrowers and their families delay home ownership, marriage, and having children among other life-altering decisions. Under the ISA model, Makes School holds the debt instead of students.
  • The concept of equity-based financing in education was first introduced in 1955 by the economist Milton Friedman in “The Role of Government in Education”. Friedman was an advocate for free markets and free societies at a time when many social scientists questioned the value of market-based solutions to social problems.
  • For a discussion of the marketplace of ISA providers, see “Students’ Futures as Investments: The Promise and Challenges of Income-Share Agreements”, American Enterprise Institute.

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Rozeta Andres
Spark for Make School
+1 253 777 3543
Email >
Visit website