Courtesy of Lagos Techie via Unsplash

A Charlotte-based tech-training provider offers stipends and jobs with its corporate partners, while another startup upskills hospital workers. Also, more on outcomes-based loans and a foundation backs partnerships between community colleges and employers.

The Job
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A weekly newsletter about the intersection of education and work. By Paul Fain

Stipend Available, No Degree Necessary

Finding entry-level hires with tech skills remains an expensive challenge across many industries, despite recent layoffs in Big Tech. As a result, a growing number of skills-training providers are working with companies that will pay to help workers transition into high-demand roles.

In North Carolina, for example, thousands of tech jobs are unfilled. The situation is dire, says Pasha Maher, who previously worked in financial services in Charlotte, including as a quant for Bank of America. He says the costs of poaching and competing to hire college graduates is encouraging banks to get more creative in their recruiting.

“If employers do not continue to invest in nontraditional candidates, their companies will be at a huge competitive disadvantage,” says Maher.

To tap into this demand, Maher in 2017 co-founded Stiegler EdTech, a small Charlotte-based tech-education provider that has focused on the city’s massive banking industry. The company now has 13 corporate sponsors, including Truist, Bank of America, Wells Fargo, and Lowe’s. These employers cover the $17,500 stipend each participant earns during the 24-week informal apprenticeship training program.

More than half of the company’s learners (60%) do not hold a college degree. In addition to the stipend, they receive free laptops and hardware, as well as help with housing, clothing, transportation, and childcare. Maher says the company, which is named for the late Rick Stiegler, a former CTO of Lending Tree, in many ways acts more like a technology staffing firm than a workforce development organization.

“We want to be able to fill real jobs that real employers actually need,” he says, including roles in software engineering, project management, cybersecurity, cloud, and data science.

The training for those jobs is tailored to the needs of corporate partners. Stiegler takes job descriptions for specific roles to create a customized curriculum, which its partner employers review. The company matches graduates with open positions.

“The heads of engineering and technology for these organizations are just as invested in these candidates being prepared as we are, since they desperately want qualified talent,” says Maher.

Stiegler screens participants in its training programs, accepting a small fraction of those who apply. Candidates do not need to have a technical background. But the company interviews and assesses applicants to look for characteristics that suggest a potential high level of performance, including an aptitude for quantitative reasoning and coachability.

So far, 160 learners have completed the training. Their average annual incomes have increased from $21K to $55K over six months. Many graduates are earning six figures 18 months after completing.

The company in October announced plans for a national expansion. It’s up and running in Detroit, with support from Ally Financial and other local sponsors. Dan Lemont, executive director for tech strategy at Ally, says the program will allow his company to “bring diverse voices and new ideas to the table.”

Maher says Stiegler is being cautious with the expansion. Its goal for new markets is to start with an initial cohort of 20 learners, quickly growing to cohorts of close to 100. The company wants to be in five cities by March.

“The employers invest because it is good business for them to create a new, reliable pipeline of diverse, qualified talent,” he says.

Free Upskilling for Hospital Employees

Stack Education also has plans for growth after seeing success with its training programs for hospital workers.

The company’s focus is middle-skill roles that don’t necessarily require a college degree. Its first programs seek to address the workforce and equity challenges faced by the U.S. clinical research field, a more than $20B industry.

Stack has partnered with several top-ranked academic medical centers. (I didn’t ask to name them in time for this article.) It works with these hospitals to develop career pathways for their workers in high-turnover and lower-wage jobs. The training is designed for employees who have transferable skills, to help them move into clinical research roles.

Hospital research administration jobs typically pay $50K to $60K to start in the markets where Stack operates. These jobs also tend to have standard hours, which is rare in many frontline healthcare roles.

“All of the programs are fully funded by the hospitals,” says David Yourgrau, Stack’s cofounder and chief revenue officer. “The overwhelming majority of participants have come from traditionally underserved and overlooked communities.”

The training programs take two to six months to complete. Stack’s curriculum is developed and delivered by professionals in the field, with skill-based modules that include real-world, scenario-based exercises and assignments. It’s also working on transfer credit agreements with several universities, with one currently in place, so graduates of the program can pursue a degree.

Yourgrau says the company’s healthcare partners tap the training to retain employees and to fill necessary open roles with workers who match their communities and already have institutional knowledge. And their costs for training are cheaper than hiring a new employee or using a staffing firm.

The Kicker: “The need is so great, the roles open for so long,” Yourgrau says. “Employers are becoming more flexible on transferable skills, educational requirements, and investing in training.”

Funding Partnerships With Employers

Strada Education Network recently announced $4M in grants for 11 partnerships between community colleges and employers. The two-year grants of up to $400K are the foundation’s first major investment in the two-year college sector.

A common thread in the selected partnerships is a demonstrated commitment by the employers to collaborate with community colleges to build a strong workforce, says Courtney McBeth, senior vice president and chief program officer at Strada.

“These employers are bringing their own resources and expertise to respond to the needs of students and the broader community in order to fill critical workforce gaps,” she says. Those resources include “tuition wraparound support and equipment, expertise to enhance curriculum and instruction, internships and apprenticeships, and hiring priority and commitments.”

Jon Schnur, CEO of America Achieves, praised the companies in the selected partnerships for “investing their expertise and resources to focus on jobs and earnings outcomes rather than just enrollment or program completions.”

Strada’s grants are part of $70M in new philanthropic investments the Biden administration recently said will help advance its Talent Pipeline Challenge. The foundation is supporting a registry that America Achieves and the What Works Plus Collaborative rolled out last month to connect local workforce projects with philanthropies.

Schnur says the goal is for other foundations to follow Strada’s lead by making similar grants over the next year, including to applicants to the Commerce Department’s Good Jobs Challenge and Build Back Better Regional Challenge.

“All of those applicants have gone through intensive planning and review processes, and many have important unmet needs at the same time that so many foundations are looking for promising initiatives across the country,” he says.

For a Q&A with McBeth about Strada’s new grants, click on over to Work Shift.

Outcomes-Based Loans or ISAs?

Work Shift published a piece last week by Lilah Burke on outcomes-based loans, an emerging way to finance postsecondary education and training. Indiana, New Jersey, and several nonprofits have created funds for outcomes-based loans.

These loans in many ways resemble income-share agreements. And as ISAs have faced increasing government scrutiny, the loans have become another way to do outcomes-based private lending. Is that a rebrand, as we said in the article?

They’re more like close cousins, several experts say. One called outcomes-based loans an “evolutionary offshoot” of the broader space, which another dubbed “forward-looking underwriting.”

ISAs and outcomes-based loans are on the same continuum, and the definition of ISAs remains somewhat murky as their regulatory treatment continues to come into focus. But outcomes-based loans differ in that they are explicitly offered as loans and have to comply with established consumer protections.

With both ISAs and outcomes-based loans, social impact investors may expect to see a return, or at least to replenish the fund. But with some programs—like New Jersey’s recently created Pay It Forward Fund, which offers outcomes-based loans—no entity expects to make money through repayment. That’s most likely to be the case with a public funder, experts say.

“We are not offering an ISA,” says David Socolow, the executive director of New Jersey’s Higher Education Student Assistance Authority. “Governor Murphy is opposed to ISAs.”

Socolow describes financing from the new fund as borrower-friendly private education loans. In addition to the income threshold and lack of interest, the loans feature affordable repayment terms and are forgiven after five years. The fund also offers monthly stipends for borrowers to offset lost wages and other opportunity costs, which they do not repay.

“No one’s ever getting their money back,” he says. Instead, the fund’s goal is to stretch the funding so more students can access training programs in high-demand fields.

Free College: Many observers would prefer that lower-income students not take on any debt while completing short-term training at community colleges. This would indeed be the ideal scenario, says Socolow, who supports more federal funding for workforce education. 

Yet the state’s free community college scholarship, which Socolow oversees, does not cover “speciality” fees in nursing, pilot training, or other cost-intensive programs, which can make those tracks twice as expensive as the typical program at a New Jersey community college. 

The Pay It Forward Fund is designed for reported fee gaps at programs like the two-year associate nursing degree at Hudson County Community College, which are typically filled by a private student loan. So Socolow says the fund essentially is “replacing a bad loan” with a generous one that carries no interest.

Open Tabs

Colorado’s Workforce

Opportunity Now Colorado is a new $85M state grant program for creating and expanding workforce development initiatives. The legislation seeks to connect K-12, higher education, and the workforce, with an explicit focus on meeting employer needs. The program’s three types of awards are for planning, seeding new partnerships, and scaling, with the distribution of grants beginning as soon as next summer.

Career Readiness

One Million Degrees, a nonprofit student support group focused on the community college sector, has received a $7M gift from MacKenzie Scott. The organization said it will invest $1M in the recently announced expansion of its work with the City Colleges of Chicago, with a goal of serving 3K students annually within four years. OMD also will tap the gift for its growing career-readiness program and to seed a national expansion.

Backing On-Ramps

Ascendium Education Group has awarded a three-year, $10M grant to Merit America, a nonprofit that provides upskilling and personalized career coaching to adults without college degrees. The investment will supplement the group’s work on the Google Career Certificates Fund by helping to cover operational costs while accelerating the growth and impact of its programming. Merit America so far has served 3,700 learners.

Maze of Credentials

More than 1M unique postsecondary credentials across 18 categories are offered in the U.S., according to a new analysis from Credential Engine. The nonprofit found a maze of nondegree credentials, including digital badges, certificates, and apprenticeships, which account for more than half of the total number of available credentials. The report called for dramatic improvements to transparency in the credential marketplace.

Digital Upskilling

Demand for digital skills is rising rapidly across a wide range of industries, according to an analysis of 417M online job postings in 10 countries during the last decade. The report, which was conducted by the Organisation for Economic Co-operation and Development and sponsored by Randstad, called on companies to offer clear retraining plans to workers in jobs that are threatened by the digital transformation.

Training Stipends

Learners who received a stipend while participating in skills training have better outcomes, according to Per Scholas and the SkillUp Coalition. A $1K stipend from SkillUp was associated with an 18% increase in the graduation rates of Per Scholas learners and a roughly 10% increase in certification and employment. Even free training can be out of reach for breadwinners who can’t afford to stop working, the report says.

It’s hard to believe 2022 is coming to a close. Next week may be the newsletter’s final issue for this year. Thanks for reading. —Paul Fain

A veteran higher education journalist and analyst, Paul focuses on the connections between education and the American workforce.