This online coding school started in Silicon Valley's hottest startup incubator is completely free for students until they find a job

Moises Dobarganes

Moises Dobarganes, senior UI developer at Florida Blue and Lambda School graduate, takes a selfie of himself holding up his offer letter.

• Lambda School is an online coding school that has no upfront tuition, but takes a cut of students' salaries for the first two years when they find a job.
• Lambda School started as a Y Combinator startup, and CEO and co-founder Austen Allred wanted it to be free and online to give students more access, especially in rural areas.
• It introduced a living stipend to help students cover the cost of living and a free summer program for women sponsored by Y Combinator cofounder Jessica Livingston.

After a hurricane hit Miami two years ago, Moises Dobarganes, 35, lost his job. He wanted to go back to school, but things weren't looking good for him.

He knew software engineering was in high demand, so he looked into coding bootcamps and various universities and colleges in Florida, but he couldn't afford it.

"They needed me to pay tuition. I didn't have any money. I was pretty much shot everywhere," Dobarganes told Business Insider.

But one day as he was scrolling through Facebook, he saw an ad for an online coding school called Lambda School with no upfront tuition.

Dobarganes's first instinct was that it was a scam. But then he thought, why not?

"I tried everything and figured, what do I have to lose" Dobarganes said. "I signed up, and within hours I got a phone call. That's how it all started for me. The strongest reason why I picked Lambda was because I couldn't afford anywhere else."

Similarly, SaaSha Pina, 23, found Lambda School online. She studied computer science in college, but felt that her program wasn't hands-on enough.

"Lambda School stood out to me because there was no upfront tuition," Pina told Business Insider. "It's so dependent on you getting a job so it was a great opportunity so there was nothing to lose."

Unlike most coding bootcamps, Lambda School is completely free until students are hired. Once they earn at least $50,000 a year, students then pay 17% of their salary for two years, capped at $30,000.

What's more, job finding is actually built into Lambda School's nine-month curriculum, and it's in both Lambda School's and the students' best interests to help students find a job. Both Dobarganes and Pina have now found full time software jobs.

More than 1,000 students are currently enrolled in the program. So far, Lambda School, which started in the Silicon Valley startup incubator Y Combinator, has raised $48 million.

Austen Allred, co-founder and CEO of Lambda School, says that eliminating the need for up-front tuition increases access for people who otherwise may not have had the opportunity to pursue school or a coding bootcamp.

And Lambda School just introduced two new initiatives to make it even more accessible: a living stipend for students and a free summer program for women sponsored by Y Combinator co-founder and partner Jessica Livingston.

"If you come from a lower income background and lower income community, you don't even realize what's out there and what's possible," Allred told Business Insider.

"Who doesn't have access to $10,000?"

Allred moved to San Francisco from Ephraim, Utah, because he wanted to break into the tech world. One of the first things he realized was that the socioeconomic differences were stark.

Lambda School

Austen Allred, CEO and co-founder of Lambda School

He recalls that when he first started raising money for Lambda School, some Silicon Valley VC's questioned why people wouldn't just attend a bootcamp instead, saying, "who doesn't have access to $10,000?"

"Moving from a small town to a place like San Francisco, you notice a drastic difference in opportunity," Allred said. "As I was thinking about my friends back home in rural Utah, they're generally on a much lower income than folks out here. They're kind of cut off from the new economy."

As part of its curriculum, Lambda School helps students find jobs, such as help with resumes and portfolios as well as career coaching. Lambda says it also differentiates itself by focusing on fundamentals of computer science, like data structures and algorithms, whereas many coding bootcamps just teach programming languages.

To make sure students are learning what they need to find a job, the Lambda School first talks to companies to understand what they hire for. The school then works backwards to design a curriculum based on the skills companies are looking for and hires engineering instructors to teach remotely.

Allred decided to create a coding school that was completely online, so that people could work remotely, and one that was free until students find a job, so that more people can afford it. Allred says when he first moved to San Francisco, he lived in a Honda Civic for months.

"That was the only way for me to break into tech was to come here and be homeless and figure it out," Allred said. "Luckily that worked, but I think that's a pretty tall order to require. It feels very personal to me because I don't want people to go through that and I don't think anyone should."

"It worked out, but it was tough."

Still, some students drop out or can't participate because of financial reasons. Lambda School is a full-time program, and students may not be able to afford to go so long without working.

Earlier this month, Lambda School introduced a living stipend program that allows students to receive $18,000 in $2,000 monthly payments. After they complete the program, they repay 10% of their salary for five years if they find a job that pays $50,000 or more.

Allred says he also hopes to expand this stipend program in the future. He says that immediately after Lambda School introduced this program, applications started pouring in.

Last week, Lambda School also announced the Summer Hackers Program for women, where 40 women will receive $9,000 living stipends while taking a 15-week programming course through Lambda School. Their tuition will be covered.

Read more: This CEO used to help startups at Silicon Valley's hottest mentorship program. Now, with a professional network for women, she'll go through it herself

"If 40 women take this course, as far as I'm concerned, that's a win for women in tech," Livingston said. "There's 40 new programmers who are women. That's not a bad outcome."

Lambda School

Y Combinator cofounder and partner Jessica Livingston

The stipend program would have been a big help to Pina and Dobarganes, both of whom had to work part-time while attending Lambda School and said the time commitment was the most challenging part. As a full-time program, Lambda School can be time-intensive. While they attended, Pina worked at various restaurants, and Dobarganes worked as a security guard.

"I would have to go home every night and sleep four and a half hours and then school. It worked out, but it was tough," Dobarganes said.

"They are investing in you to be successful"

In the future, Allred would like to expand Lambda School to other fields beyond programming, such as nursing, business, and more. He thinks the model of providing free tuition until students find a job is much bigger than computer programming.

"When your incentives are totally aligned with the students, you would do an MBA really differently and create a law school really differently," Allred said. "We're barely even scratching the surface of what Lambda will look like."

The commitment of Lambda School might not be for everyone, but Pina, who now works as a software engineer at Intrusta, thinks it was worth it. She left college after her third year, and if she had stayed in school, she would have been in more debt. Now that she has a job, she can go back to school and finish her degree if she wants to.

"The most valuable thing I got out of Lambda School was the community and the network," Pina said. I was able to reach out to anyone 24/7."

Read more: This free online tool makes it so easy to learn how to code, kids are using it to build websites, games, and even apps to help with their math homework

Dobarganes even spent three months mentoring other Lambda School students, answering their questions on classes he had already taken. He now works as a senior UI developer at Florida Blue, and he says he went up three tax brackets after Lambda School.

"They are investing in you to be successful," Dobarganes said. "I went through Lambda which had nothing to give me in terms of certifications, yet I was able to land a job. That tells me they're doing education right by teaching the skills you need to know, rather than all this BS where they're trying to milk you for your money."