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The Innovation Police: Are Code Academies Caught in the Government Sausage Factory?

Dean Florez

President, Balance Inc.

This piece is the first in a three-part series.

When something sounds too good to be true, expect a long line for the many willing to get in. Also, expect government to be on the heels of this new development with an ounce of regulation and a pinch of oversight.

Over the past few years, code academies have proliferated the higher education and vocational landscape—posing big questions on the value of a formal four year college computer science degree and answering consumer demand with a savvy proposition: Come to us for an indispensable skill and we will line you up for a high paying job, without making you incur $100,000 in student debt.

Although many code “boot camps” claim they make no hard promises on employment, students are passing the eager word, creating staggering admission applications at places like Hack Reactor. These companies offer no formal guarantee of employment after graduation, but unabashedly share that of the 80 students who completed their boot camp, 79 have already locked up a job in Silicon Valley—netting an average salary of $110,000 per year.

The job aroma has hit hungry Millennials and those forced into a career change due to a turbulent job market. As a result, job seekers line the gates of code academies, a field where there are four times as many openings for programmers as there are qualified people to fill them.

The Smell of Sausage

Government also smells successful innovation and an aura of unprecedented job creation in the air. Taken by surprise, regulators have started to ask questions.

Where are the quality standards? Is there deceptive advertising occurring? Are substandard degrees or certifications being produced? Where is the oversight? Who’s accountable, and what’s that unrecognizable smell?

As with other expanding, originative industries, code academies have recently been involuntarily invited to stand at the front gates of government’s “sausage factory”—a place where it’s best not to see how things are made. A destination where no downloadable app can rescue budding cutting-edge industries from a legislative calendar that grinds and churns a majority of innovative holistic enterprises into antiquated unimaginative derivatives of what lawmakers are willing to accept. A factory so old that most workers probably think “HTML” is a type of sexually-transmitted disease.

I know the factory because I’ve worked there, as a foreman of sorts.

Over the past year, a feverish inquiry by state bureaucrats is attempting to make sense of code academies. This investigation has created an extremely frustrating and very unpleasant process for innovators, one essentially hidden from public view. In its zeal to regulate, government has decided to produce a widely sought product to yield the needed individuals qualified to program our apps, websites, computers and phones.

Although few would enjoy watching the method that government “factory workers” use to grind this industry up, the public should be informed on the impact it has on an end product overhauled in the name of consumer protection, especially given the impact it has on technological innovation in our nation.

The Long Line to Creditors or a Job

The long lines at code academies are understandable. People want high paying jobs, and a promise to deliver on that prerequisite creates the type of demand that has historically fueled traditional higher education.

The new economy needs more educated workers, so what’s the problem?

In a single generation, the United States has fallen from first to 16th worldwide in the proportion of college graduates. At the same time, the demand for workers with some level of formal learning after high school has grown by 3 percent each year, but the supply of college graduates has expanded by only 1 percent during that same time. By 2018, more than 60 percent of the nation’s jobs will require some higher education, and at the current pace, the U.S. will fall about 3 million degrees short of attainment.

Why? The price of college has increased faster than the median household income, while student loan debt has surpassed credit card debt for the first time ever. Along with their degrees, students graduating from college carry an average of $25,000 in student loan debt.

But while delinquency rates for all loans have trended downward for the past three years, student loan delinquencies have catapulted to 11.5 percent, and are 90 days past due.

Many of us have read countless stories of the 40,000-plus students who graduate each year with four-year computer science degrees, yet as the Bureau of Labor Statistics predicts, that’s only a fraction of the 1.4 million coders who will be needed by 2020.

This “new economy jobs gap” has given rise to programming “boot camps” that offer skill-based, competency-backed education without the ivy and clearly without the four-year path required by the league. Warehouses are replacing classrooms where large monitors substitute as notepads, instructors speak Java, and students spend over eight hours per day in class, sometimes seven days a week.

It’s the new higher education model, the way out of what David Dayan called the “Great Delay,” where historical milestones of adulthood—moving out of the childhood home, buying a car, getting a mortgage—are coming much later in life, “creating an entire generation a hole from which they cannot escape.”

Students are willing to stand outside the gates of coding academy’s because only 27 percent of college graduates are hired for a job related to their major. Coding offers a specific skill with a huge upside employment potential able to conquer the uncanny gap between (1) higher college enrollment rates; and (2) falling job creation rates.

Higher education commentator Kevin Carey put it best: “For a growing number of students, entering the lucrative college-educated realms of the economy is like being smuggled across the border—you can get to the promised land if you try hard enough, but you arrive in a state of indentured servitude to the shady operators who overcharged you for the trip.”

So why are regulators—the innovation police, so to speak—cracking down on innovative code academies? Next Wednesday, Dean Florez will explain why some major code academies have been targeted Bureau for Private Postsecondary Education.

Dean Florez

President, Balance Inc.

Dean Florez is the president and CEO of Balance, Inc. and has 20 years of legislative & policymaking experience in the higher education field.