
March 5, 2019
Lambda School’s Austen Allred on Solving Problems in Education – Problems Sighted
Check out the Problems Sighted Episode Page & Show Notes
Key Takeaways
- Aligning incentives is critical
- Schools and their students are usually not aiming for the same thing
- Schools may want to “expand the minds” of their students, while students simply “need a freakin’ job”
- Schools and their students are usually not aiming for the same thing
- Lambda School aligns incentives with students by enabling them to defer tuition until after they’ve landed a job
- After students graduate and get a job, what happens?
- They give 17% of their salary back to Lambda School for 2 years, capped at a max of $30k, but only after they’re earning an income over $50,000/year
- After students graduate and get a job, what happens?
- One huge problem with massive open online courses (MOOCs) – the completion rates are incredibly low
- Student debt is growing by 0.1 – 0.2 trillion dollars a year
Intro
- Austen (@Austen) is the co-founder and CEO of Lambda School
Always Align the Incentives
- Schools and their students are usually not aiming for the same thing
- Schools may want to “expand the minds” of their students, while students simply “need a freakin’ job”
- This causes plenty of negative externalities
- An externality is a cost or benefit that affects a party who did not choose to incur that cost or benefit
- This causes plenty of negative externalities
- Schools may want to “expand the minds” of their students, while students simply “need a freakin’ job”
- Austen considers it likely that there will be an unbundling of university offerings to better serve specific student goals
- Lambda School, for example, is specifically designed to help students find technology jobs
The Problem with MOOCs (Massive Open Online Courses)
- People originally saw an opportunity for optimization
- The idea was to find the best professors for different subjects, build amazing courses around their lectures, and put them online for anyone to take
- Surely it’d be better than having plenty of different mediocre professors teach at different institutions
- However, the completion rates of these courses are incredibly low
- The idea was to find the best professors for different subjects, build amazing courses around their lectures, and put them online for anyone to take
- It turns out that the lecture isn’t as important as what happens around it
- Working with others and having adequate social pressure are critical in helping you finish a course
- MOOCs left that key component out of their instructional design
- Working with others and having adequate social pressure are critical in helping you finish a course
Lambda School
- Fundamentally, the school tackles a human psychology problem:
- “Humans have a really hard time pushing themselves to do difficult things and to keep continually pushing themselves beyond what they’ve done in the past“
- Lambda School aligns incentives with students by enabling them to defer tuition until after they’ve landed a job
- After students graduate and get a job, what happens?
- They give 17% of their salary back to Lambda School for 2 years, capped at a max of $30k, but only after they’re earning an income over $50,000/year
- This structure is made possible through Income Share Agreements
- After students graduate and get a job, what happens?
- Lambda’s success is completely dependent on their students succeeding
- Because of this alignment, they’ve forced themselves to innovate and create a “full-stack” solution
- Re-imagined admissions, the school itself, outcomes, financing, etc
Income Share Agreements
- An Income Share Agreement (ISA) is a financial instrument that allows parties to pledge a portion of their future income
- This is how most students pay for Lambda School
- While it’s a powerful tool for aligning incentives, it doesn’t solve all problems
- Implementing an ISA in colleges (like Purdue has done) is a step in the right direction, but it also creates several challenges
- Most revenue immediately goes to $0
- Schools have to figure out a selection process to find the right students
- The instructional design has to account for the trade-offs of online learning
- Implementing an ISA in colleges (like Purdue has done) is a step in the right direction, but it also creates several challenges
- Austen believes you need a full-stack, vertically integrated re-thinking of how things should be in order to make it work at scale
- “Chevy can definitely produce electric cars, and that’s a great thing. But it’s still not a Tesla.”
- That implies that every career path potentially represents an opportunity for Lambda School’s integrated approach
Student Debt
- “Student debt is growing by 0.1 to 0.2 trillion dollars a year. That’s not okay.”
- “We’ll see the impact of student loans on the economy for another 30-40 years”
What problems does Austen wish people would work on?
- International credit infrastructure
- More income verification
- It’s really hard to use ISAs in other countries, or even extend consumer credit, because the infrastructure just isn’t there yet
- “If you can figure out Income Share Agreements in India, please give me a call”
- More income verification
- International arbitrage for code reviews
- Find really talented engineers earning low U.S. dollar-denominated salaries, and pay them to review code
- Immigration as a service
- Making immigration to and from various countries clear and easy is probably a billion dollar opportunity
These notes were edited by RoRoPa Editing Services