The federal government will allow students to use federal funding to pay for a small group of coding boot camps and massively-open online courses, or MOOCs, for the first time. The new pilot program, announced Wednesday, will open up access to the exploding world of boot camps and nontraditional online programs, which have long been largely off limits to low-income students because they cannot pay with financial aid.

The program, which will at first be limited in scope, is an experimental step into an unfamiliar world for the Education Department, which has typically shunned nontraditional programs and those outside of universities. Federal aid has historically been available only to students attending "accredited" schools, or those that have gotten a stamp of approval from outside monitoring organizations. Students attending coding boot camps — which can cost up to $20,000 — and other programs that operated outside of the sphere of traditional universities were out of luck, forced to pay out of pocket.

"There's a lot of creativity in the higher education space, but you've got this problem that if you're a student who requires federal aid, you can't get any financial assistance," said Stuart Butler, a senior fellow at the Brookings Institution. "This is a step in the right direction."

The department's aid rules are so strict that even Arizona State University's attempt to rethink the freshman year, announced in April, is ineligible for federal financial aid because students pay for the credits after they have completed, rather than upfront, as the department requires.

The pilot will also open the door to regulation of coding boot camps, a space that is exploding in size and popularity but that has so far operated well outside of the federal government's regulatory spotlight. Many have worried that boot camps are rife for potential abuses — with sky-high costs and promises of jobs for those who complete programs, they carry a specter of the early days of the for-profit college sector. At least one state, California, has been fighting to regulate the programs itself by forcing them to become licensed with an a state organization.



The Education Department will create "quality assurance entities" to vet programs, which it said would be made up of people who were familiar with boot camps and massive online courses. It would still require, however, that programs be linked to a traditional university partner.

But some experts worry that the move to allow federal financial aid at coding boot camps and other nontraditional programs might also open the sector to more bad actors, drawn by the lure of federal money that allowed for-profit colleges to grow rapidly in the 1990s and early 2000s.



"For every coding academy that's making good on its promise of jobs, what if suddenly the availability of financial aid means that low-quality operators flood the space?" said Elizabeth Baylor, the director of postsecondary education at the Center for American Progress. "It's really good that this is a pilot program," she said, so that the Education Department can be sure it is carefully vetting and regulating the programs.

There is also a chance that federal aid could change the success rates of many coding boot camps, which have, because of their high price points, been largely self-selecting, Baylor said — drawing mostly from students with bachelor's degrees and significant work experience. As boot camps multiply in number and open up to all students, they could struggle with things like job placement.

"I wonder how much those boot are teaching skills that are transferrable to people who can’t afford to pay — people who might not have a bachelor’s degree already," Baylor said.

But the federal government's new attempts to oversee and judge the quality of boot camps and MOOCs in the course of providing aid, she said, could help answer those questions. "This could add accountability that's not in the system right now," Baylor said. "If measured properly, it could answer concerns about quality and economic outcomes."