Rani Coager and Seyed Amiry believe the current model of financing institutions of higher learning is unsustainable. It has created a population paralyzed by debt and a skills gap that leaves too many un(der)employed despite the fact that nearly half of U.S. employers struggle to fill open positions. Croager and Amiry see this as an opportunity for innovation.

After a long research and development phase, Cooperative Education Ventures is poised to admit its first incoming class next fall right here in Oakland. The institute will be an unprecedented application of the consumer-owned co-op model to higher education.

The curriculum will “train and empower entrepreneurs as well as those who are seeking jobs…particularly in communities that have been under-served, the demographic that could stand to benefit the most from this approach,” said co-founder Seyed Amiry. Because it is a member-owned enterprise, the idea is that participants will have one hundred percent of their tuition fees returned to them over a period of several years.

The first-of-its-kind school will be a hybrid between a career college and a tech boot camp, with an additional emphasis on “whole systems thinking” and lifelong learning. Amiry and Croager have developed a “personalized learning system” that adapts their academic, motivational and financial support to students’ needs and abilities.

“We want to match the success of a [$10-15,000] tech boot camp, but not just in high-tech,” explained Amiry. “We are focusing on small business owners, local services, retail, salons, artisan entrepreneurs. We’re not just focusing on where the highest potential revenue would be.”

Amiry is the former president & CEO of Presidio College and before that a CEO in the tech private sector. Rani Croager is a self-described “reformed investment banker,” now using her powers for an altruistic purpose.

“I’ve witnessed first hand the perverse incentives created by private equity and Wall Street,” said Croager. “It’s important to untether education from that. In our model, we’re creating a beneficiary, or stakeholder, where they benefit from the success of the enterprise. We’re aligning stake-holder interests.”

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Here is how the finances break down: once the school is up and running, income will exceed expenses, explained Croager. That annual profit will be allocated to four pools, the proportions of which will be determined democratically by the co-op’s members: “(1) a portion to be retained by the cooperative to enhance and expand program offerings; (2) a portion to be distributed to community partners that help us with the curriculum design, instruction and referrals to the programs; (3) a portion to be distributed to investors; and (4) a portion to be distributed to program participants.”

Participants retain their membership up until their fees have been reimbursed in full. “Annually, that portion of the co-op’s profit that is to be distributed to program participants will be divided up among active members on a pro rata basis (based on the program fees they paid).” This is similar to REI, in which you receive an annual rebate from their profits based on your pro rata purchase for the year. “The one twist,” explained Croager, “is that we intend to rebate all of the program fees.”

From the time that participants graduate until their fees are reimbursed, their membership will take the form of a rich alumni platform for exchanging information, collaborating, investing and continued support.

After years in business education as well as the private sector, Seyed Amiry feels it is crucial to rethink the “drive and emphasis put behind the bottom line…which is often driven by Wall Street: making quarterly profits, making bonuses, short term quick gains at the expense of sustainability and authentic engagement of stakeholders.”

Rather than teaching aspiring entrepreneurs to accommodate the perverse incentives that so often lead to backfires for businesses and communities at large, Amiry and Croager have created a curriculum designed around “whole systems thinking.” The approach takes into consideration the constellation of stakeholders that are affected by the business venture, rather than disregarding them as externalities. Systems thinking refers to looking at all components of a system in order to solve problems at their roots rather than isolating a problem from its context and mitigating one symptom at a time.

If you develop a school curriculum around whole systems thinking and then extend the logic of your curriculum to the financial structure of your school, you will wind up with something like Cooperative Education Ventures. If all the graduates of that school do the same, we will wind up with a very different marketplace, and a very different city.

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