Knoma: the “anti-student loans company”
Hi Brett! Student loans for no fees? How is this possible?
It's true. We help students pay for courses in a variety of subjects, and tech in particular. We lend up to £10,000 to cover the cost of the course, and the fees go straight to the course provider. Knoma gets paid an agreed percentage of the course fee by the education provider for filling a place and taking all the risk. Students pay us back when they find work afterwards. We fund vocational courses, so the payback rate is high, which is why we can avoid the punitive student loans model.
Some people have called us the “anti-student loans company”.
What reception has your concept got?
Students love it because they can attend the course they want, without worrying about the upfront cash. And we are signing up more and more institutions to our model. We currently have 120. Our site is designed to help learners decide what they want to learn, and works as a search engine for courses. You'll find courses by Code Nation, the Data Science Institute, and the Tech Talent Academy. It's not all tech! There's the London School of Barbering if that's your thing.
The model works because everyone benefits. Our partners fill up empty places that would otherwise go to waste. They then get paid within 24 hours of a student being accepted onto a course. That means no negative cash flow or having to worry about getting their money back. We take on the risk ourselves and support the minority of customers who might at some point struggle to repay.
Students are freed from paying interest on loans they’re using to gain skills industries need. We all win.
How's it going so far?
We launched two years ago at the start of the pandemic with a mission to better enable access to lifelong education. Today, we’re working with organisations ranging from universities to technology bootcamps. Month by month we’re seeing demand for course finance increase and huge interest in courses such as full stack development, data analysis, design, and business transformation. Even that is changing with an upturn in demand for digital marketing and AI.
Digital bootcamps are one of the most common course offered by Knoma. What exactly are they?
It’s important to understand that there are two types of bootcamp available. Coding bootcamps are privately owned and operated whereas. Skills bootcamps have been developed in partnership with employers, colleges, and local authorities, and were launched last year as part of the National Skills Fund. They both serve a purpose in delivering the hard skills that the UK economy so desperately needs and which universities have been much less focussed on. They offer a much more affordable alternative to degrees and consequently, are used by people of all ages, but especially for those that are 40 plus. They’re also excellent for giving people a fast insight into whether they’ll actually enjoy the job they’re training for, because the project work undertaken is more practical, like building a website or app.
Are bootcamps the solution to the digital skills crisis? How are they impacting universities?
They’re not the sole solution or even the most popular. There were 750,000 applications for full-time undergraduate places through UCAS in 2021 in all subjects, a record level. Of these, around 560,000 were accepted, so it’s clear that bootcamps are not impacting universities but offering a much-needed alternative for those who don’t want to spend three or four years in education. Unlike universities they’re much less focussed on fundamentals and theory, which some really enjoy. That is not their purpose, however.
They’re designed purely to give people the opportunity to gain the in-demand skills employers are looking for, so they can fast-track to a job interview.
Do bootcamps have a strong future?
Absolutely. Bootcamps initially offered digital skills such as cyber security, software development, DevOps and data engineering. Now we are seeing design, product manager, digital marketing and a host of more technical and specialist courses as well as full and part-time options. These non-accredited courses are being taken seriously by employers, who recognise their value and are keen to fill their vacancies.
It’s clear to everyone that the days of people spending £100k to do a university course are over. Racking up debt is a nonsense and educational providers are eager to imitate the boot camp model now they know how successful it is. Given the increased investment we are seeing and their popularity, the offering of bootcamps will only continue to evolve.
What can we expect from Knoma in the future?
In the near future we expect to be able use open banking to monitor the careers of our customers. We’ll collect anonymised data and use it to showcase the professional success of previous students who have successfully completed their courses. This data will be used to inform new course applicants which options might be the most suitable for them, as well as the salary they can expect to achieve. In effect we will become an advisory service as much as a finance solutions provider.