Since 2020, the for-profit tech training school Codeup was forced to return more than $760,000 in tuition and fees to the Department of Veterans Affairs for being unable to place veterans into relevant jobs after graduation, according to VA Press Secretary Terrence Hayes.
Before the San Antonio-based coding school closed suddenly last month, it had focused heavily on enrolling veterans who could use VA benefits as a stream of revenue, with veterans making up roughly four-fifths of the total student body.
A VA pilot program called VET TEC, created in 2019, covered tuition and housing costs for veterans to access technology training. But under its rules, the VA held half of the full tuition payment in abeyance until after the veterans landed jobs in their field of study. If they weren’t placed into jobs within 180 days of graduation, schools like Codeup not only missed out on the final payment, they also had to return the partial tuition payments they had already received.
Even as its revenue was being drained by these repayments, Codeup continued a relentless push for growth, recruiting new students at the same time it was struggling to place graduates in jobs, according to a more than half dozen former employees.
In interviews, they painted a picture of good intentions and effective programs undone by feckless leadership and a lack of communication, which in turn led to high turnover and a chaotic working environment.
Leadership, they said, sought to recruit and hire even as a post-pandemic tech hiring slowdown led to a glut of students unable to find entry-level employment within Codeup’s heavily promoted six-month tuition refund guarantee. Jobless students not funded by the VA often sought tuition refunds, further straining the company’s finances.
By several accounts, the school was facing crisis conditions by early 2023.
“The entire narrative really feels like death by a thousand cuts — dozens and dozens of unforced errors with a mostly absent leadership team sitting in a high tower,” said former instructor Kenneth Howell.
In the weeks since its collapse, Codeup’s co-founders, former CEO Jason Straughan, board chairman Michael Girdley and Chris Turner have remained silent on the school’s demise.
Turner, founder and CEO of Turner Logic software company, appears to have been uninvolved for the past several years. Straughan’s LinkedIn profile lists him as a chair at Vistage Worldwide Inc., “the world’s largest executive coaching and peer advisory” company. The company’s website describes its chairs as “accomplished leaders who’ve led companies to greater heights throughout their careers.”
Girdley, who has positioned himself as a startup and business guru offering “lessons from my $100M empire,” continues to hype his expertise and products on social media. He recently promoted one of his e-booklets as “Your tool for surviving a cash crisis.”
None responded to requests for comment.
The school’s now-complicated legacy is clear in comments from former employees and students on social media under news accounts of Codeup’s demise. Some lauded the lives changed and careers launched — hundreds of people have careers in tech thanks to Codeup — while others expressed anger, sadness and “saw-it-coming” resignation.
Codeup had emphasized recruiting veteran students since at least 2016, and doubled down when VET TEC was rolled out in 2019, according to the former employees interviewed, some of whom were recently laid off while others were employed during earlier periods in the school’s 10-year existence.
After several rounds of layoffs in the fall, including Straughan stepping down on Dec. 8, 10-year-old Codeup abruptly shut its doors on Dec. 28 — almost three weeks after telling current students they would be able to complete their programs and continue to receive job search support. At the time, leadership assured students via email that the organization would work with the Texas Workforce Commission (TWC) to “issue any available refunds” to them.
At the time of Codeup’s closure, 56 students enrolled were using G.I. Bill benefits and 94 enrolled in the VET TEC program, according to the VA. Only a handful of students appeared to have been non-veterans, many of whom are now left with big loans to repay.
The TWC, which regulates non-degree-granting career schools, told the San Antonio Report that representatives from Codeup spoke with commission officials on Jan. 8 and indicated that they’re “working with” with students to place them in comparable programs or courses.
In cases where that is not possible, Codeup may be on the hook for tuition refunds.
A TWC spokeswoman said that while it is “unusual” for TWC to file suit against a for-profit school, “in some cases, TWC will work with other state agencies when a lawsuit is warranted” for a school’s failure to comply with proper closure procedures.
Students who are staying in touch with one another online confirmed that Codeup is sending emails with links to schools and other opportunities, but said no one with the school is working with them individually.
UTSA is the latest school to offer students the chance to finish their coursework; the Alamo Colleges District and other for-profit and non-profit bootcamps have also offered assistance.
‘10,000 students by 2033’
India Byrd wore many hats in the roughly year and a half she was employed by Codeup. Hired in mid-2022 as a student experience specialist, Byrd moved to the placement team after her original team was dissolved, then got promoted to lead career coach. In late December, her title changed one last time, to director of career services.
Byrd confirmed that post-graduation job placements for certain programs had plummeted in the months before Codeup shuttered, and said the school was paying out partial refunds to students when they didn’t complete the steps necessary for full refunds.
Before the school’s failure, “10,000 students by 2033” was the goal, she said, despite protestations from instructors and a rotating cast of mid-level employees that the school didn’t have the infrastructure to support that level of growth.
But grow it did. In 2020, according to documents released by the VA in response to a Freedom of Information Act request, Codeup had roughly 25 employees; that jumped to 45 in 2021. Roughly 116 students graduated that year. By 2023, if the school had not closed suddenly, 382 were on track to have graduated — growth of almost 230%.
The school was expanding geographically as well, with a campus in Dallas added in 2019. Small offices to oversee “distance learning” later opened in Houston and Austin.
“It was insane how many cohorts we were bringing on at once,” Byrd said. In 2023, documents show, cohorts of up to 25 people were starting each month.
Ryan Stephens, who was hired in October 2021 to manage student data, also transitioned through multiple roles, finding himself in early 2023 attempting to remedy Codeup’s application to the U.S. Department of Education to gain entrance to a program that would have allowed students to use federal student aid for tuition.
“Typically, you were promoted by the fact that somebody above you just quit,” said Stephens, who left the school before the first round of layoffs in October. “It created this feeling of like, cascading failure. There was no knowledge transfer.”
For Air Force veteran Casanova Geary, who started at Codeup’s Dallas location in mid-2022, the unsustainable growth and high turnover resulted in his cohort not being taught by instructors with industry expertise, which the school promised and VET TEC required.
When an instructor with industry expertise stopped teaching his cohort after the first few days, the class was taught by two former Codeup students who were hired directly after their own graduation, Geary said.
“They were crap,” he said. “Horrible instructors. We were learning from … YouTube.” Geary complained to school officials, and Codeup sent instructors from San Antonio to Dallas in an effort to remedy the situation. A subsequent instructor was hired, who did have industry experience, but he “quit after a month or two,” Geary said, and the rotation of instructors continued.
Geary said the school ended up failing his entire cohort, and “tried to make an example out of me, because I wouldn’t keep my mouth shut.” He said certain staff bullied him and isolated him from other members of his cohort.
Early promise
When Girdley launched Codeup in 2013, the goal was to create a pipeline of entry-level software developers to feed San Antonio’s nascent but energized tech sector. He brought on Straughan and Turner, whom he’d met though the downtown San Antonio startup incubator Geekdom, as founding partners. They would run things while he served as CEO.
Girdley was born into the family that owns Alamo Fireworks and served at one point as its CEO. He remains chairman of its board, according to his LinkedIn profile, and the company is one of a dozen he describes as being part of his “+$100 million holding company.” That company also includes Dura Software, which itself acquires niche software companies. Dura made its 17th acquisition earlier this month.
Another is Codeup, which Girdley described in a blog post that appears to have been published in spring 2023, as “doing [eight] figures of revenue per year with 50 staff and [three] offices.” During that time, Codeup was struggling to place students in jobs and returning money to the VA, according to the agency and former employees.
Documents released by the VA show that as of 2019, Girdley held a 60% ownership stake in Codeup, while Turner and Straughan each owned 20%.
Straughan, who founded a “boutique app development consultancy” at the same time as Codeup that has since folded, took on the CEO role in 2017 after Kay Jones, a former Rackspace senior manager, departed from the school. Crystal Poenisch, who who now works in venture capital-backed cybersecurity, was a student in 2015 when Girdley was CEO.
She said she had a negative experience as a student, but admired Jones, who hired her as a marketer in 2017. At the time, Codeup was a hard place to be a woman, she said. “Lots of women I know said after Codeup they never wanted to code again. It was heartbreaking.”
She said she and Jones were attempting to diversify the largely white male student body “of a certain income level,” when Jones departed. Poensich said she’d never forget Straughan “telling me Kay got too big for her britches and forgot who owned this school.” She said he fired her two days after Jones’ departure.
‘Cry night’
According to Byrd and other employees, by 2023 Straughan was telling some staff he was going to be replaced as CEO if he did not right the ship. Byrd described Straughan as urging employees on an early 2023 retreat to do everything they could to bring in more students. She described the event as akin to an evangelical youth camp “cry night,” where participants share meaningful spiritual experiences, often crying together.
By October, the chief operating officer had been replaced with Doris Salisbury, who was described by former Codeup employees as a fixer Girdley had hired to turn around other companies in his portfolio. Byrd said Salisbury quickly assessed the grim reality of the school’s finances.
After at least two rounds of layoffs that fall, Straughan stepped down on Dec. 8 and Salisbury became interim CEO. In a social media post on Dec. 8 since made private, Straughan wrote, “I’m a strategy and growth person, but I’m not a good operator.”
Three weeks later, the emails announcing the school’s closure were sent to remaining staffers and students; within minutes, Codeup’s Slack had been deleted, including a long-running channel for alumni to keep in touch.
For former instructor Maggie Guist, who developed the data science program for Codeup and described her early time at the school as magical and supportive, watching leadership relentlessly push for growth despite Codeup’s inability to deliver on its promises was demoralizing. The collapse just made her angry.
“You’re playing with people’s lives here,” she said.
Education reporter Isaac Windes contributed to this report.
