I attended Lambda when it was first starting out. I think I was in the third or fourth cohort. At the time, the sell was that you didn't have to pay anything unless you got a job using the skills you learned from them. I was pretty naïve, I guess.
Things seemed fine in the beginning. The instructors were good, and I liked that there were actual live classes. Things degraded very quickly. They kept changing the format and the curriculum ("iterating"). They doubled the length of the program that I was in, which made it impossible for me to even finish it. I was working in a tech support job where we had to do shift bids and no shift was guaranteed. I enrolled in a plan that fit the shift I was working, and the expected end date, and when they changed the program length and format, I couldn't complete it.
They promised career guidance, including having a career councilor, but I never got one. They kept telling my cohort we would get our councilors after this or that milestone, but when we got there they would move the goalpost again. The closest we got was a resume course that was not relevant to tech at all and a resume review by another student.
When I had to drop out of the program, I tried to get them to cancel the ISA or reduce it, but they said I had completed "most" of the curriculum and thus was on the hook for all of the ISA.
They then started billing me for it because I was working in tech, in the job I had for 6 years before I ever even started their program.
I went to a lawyer and was told it wasn't worth suing, because they required arbitration in NYC, which would cost more than I would save.
Please contact the CFPB, it is worth your trouble. Everyone's blood should be boiling reading TFA, such as:
> Allred tweeted that the school achieved a 100 percent job-placement rate in one of its cohorts, and later acknowledged in a private message that the sample size was just one student.
Here is an HN thread I had with him [0]. He claimed that 90% of those who were job seeking got placed. The key point was the definition of “job seeking”, of course. I'm happy to hear that authorities took action.
I know dozens of students who attended and turned their lives around because of the program.
I see Lambda Alumni on every page of LinkedIn job boards.
I'm sure some people had a bad time, but all of the ISA issues GP stated are clearly stated in the contract, and these calls for "jail time" are absurd. People clearly know almost nothing about the program, or its success rate.
Don't forget that Student Loans still make this look like charity by comparison in virtually every way.
If 90% of students have a good experience but the 10% of students have a similar experiences to the poster there, then I still think Lambda is another ethical disaster of a start-up.
"It's better than a typical USA student loan" is a very low bar.
Between smarts, motivation, and time most people cannot "simply self-teach". There's a reason education is such a massive industry, and entire professions exist around it.
> No, but you can expect none of them to have been lied to.
The CFPB report really doesn't make this obvious. All I've seen in this thread and in the CFPB statement are claims with nothing to back them up. The worst I've seen is "100% cohort", which doesn't seem to condemn the whole program.
> The defense is he's a fraudster, but incompetent?
The defense is I'm having a difficult time finding actual evidence of fraud.
If 90% of students aren't _scammed_, but 10% are _scammed_, there is an ethical disaster. But at this point it's clear you either have some actual financial incentive/relationship with Lambda School, or you just don't want to be wrong. Either way, I don't think engaging any further will be fruitful.
Shutting down discussion of a topic that otherwise has merits because you got offended by the idea is how we got here.
If you don’t like it you’re not forced to offer a valid rebuttal. You have the option to disagree or not. But taking the easy way out by shutting down the conversation just makes the situation worse for everybody. Nobody was on a high horse until you went there.
I'm not sure all the ISA issues are clearly stated in the contract, or whether they were clearly stated in all the contacts, before they started to get into trouble.
But they clearly lied about much of this stuff in the headline publicity. Lying prominently and 'clarifying' the lies in the small print is obviously still fraud.
Doing fraud and saying 'but the majority of the people we defrauded still had an overall positive experience' is not a defense.
Jail time for consumer credit fraud is a perfectly normal outcome. Don't lend consumers money if you don't want to be in a regulatory environment where fraud is taken very seriously.
Can you point out the lies? I'm genuinely trying to find them, and the CFPB article does not provide any evidence other than a few marketing quotes.
I'm very sure all the ISA issues are clearly stated in the contract. Everything is very clear about the fact that you will pay a minimum of $17-18k, and a max of $30k as a percentage of your monthly income. It was very clear that missing a payment would incur the entire loan being owed immediately (presumably it would go to collections).
The "hidden $4000 finance charge" I don't really understand, given that it is apparently built into the loan. It's not like you get charged an extra $4000 on top of the $30k (assuming you pay that).
I'd still choose this route over 4 years plus college tuition for a CS degree.
Everything I had seen said you’d only pay if they helped you land a programming job. It looks like more than a few people were surprised when the actual terms allowed them to collect a percentage of income from unrelated employment. I never went through the program, but I’ve seen more than enough marketing and promotion from it; these revelations are quite surprising to me.
The CFPB statements outline where BloomTech was misleading at best. You can’t dress up a loan as some other name and skirt regulations, no matter how much small print you use.
It seems like you are implying that lies in "marketing quotes" are not real lies? I don't think that this is the case.
In the rest of your comment you repeat the claim that I was responding to, that all the correct information was in the contract. You seem to have ignored the two key caveats I made: that their contracts might be compliant now, but they probably weren't before they were first investigated. And secondly that they have demonstrably lied extensively outside of the contracts themselves. Lying to convince someone to sign a contract which of itself is truthful, is definitely fraud.
Perhaps you don't understand "the hidden finance charge" because you don't understand regulation of consumer credit. When you buy a car, the dealer has to show you numbers breaking down what the cash price of the car is, and how much you will pay in interest. This stops them tricking people by eg raising the sticker price and telling you that the credit is cheaper than it is. This isn't a guideline, it's a law. And the numbers have to be presented in a way which is not obscure or misleading. Scott Tucker got 16 years for this.
Thanks for being honest about your experience. All of the Lambda grads I’ve talked to in person have similar negative stories about how their experience felt like it was being made up on the fly.
It’s difficult to speak out about problems with your educational institutions because your own reputation is partially attached, at least in early career. I see a couple people in my Twitter and LinkedIn feeds defending BloomTech publicly today despite having previously complained about their experience in private. It must be difficult to see your educational experience being exposed as being poor, which probably prevents a lot of people from speaking out. The Lambda/BloomTech grads I know are actually smart people, but they had to self-teach their way there. Lambda lured a lot of smart people in by proximity to Paul Graham and all of the positive press they received online when they started out.
I am high level member of a volunteer based org that does online workshops in the tech space, and does dozens of workshops in dozens of countries every year. I fail to understand how you can mess up basic things like having a predecided curriculum, good teachers, a fixed schedule, or providing quality outside class support. We do all of this on a shoestring budget.
The stories I have heard about Lambda/BloomTech seem to show almost a willful attempt to not get the basics right. I understand the financial component might have been difficult, but the education is straightforward. To fail it with millions of dollars of funding is outstanding.
I think if your focus is on actually educating people, and you're willing to invest your resources in those people, you can do quite well. If your focus is on scaling and creating an appealing image to investors, the education part isn't so easy.
There's probably something to who you're attracting as well. If your pitch is "come work hard with us and we'll help you learn", you draw people who are ready to learn. If your pitch is "come take out a [loan we won't call a loan] with us and we'll make you a bunch of money", you draw a different set of people.
That's not even saying anything against the students of Lambda school. I believe one issue has been people joining to improve their economic outlook, while working a different job to continue paying bills. You have to be pretty thoughtful about how you work with people who have a tight schedule. You can't just throw your curriculum and your expectations up in the air any time you want, and expect all those people to "pivot" with you. But the focus always seemed to be more on the "success" of Lambda school than on the actual success of every student.
From all the stories that come out of Lambda school, it really feels like the classic predatory view of students. They're not so much learners as they are potential sources of money.
They simply happened to be at the right place at the right time, ie a time where “software was eating the world” and also the iPhone/Android took over.
Finally, the success of the actual smart people in Tech (Google, Apple, Amazon, FB) who are largely pre-iPhone companies, meant that there was a lot of venture money flowing around, when the VCs discovered the Uber model. Spend a ton of money to establish monopolies (and break a bunch of laws along the way, which you could get away with because Tech still had a good reputation thanks again to the pre-iPhone pre Web 2.0 companies) and walk away with the money while exploiting customers, clients, governments and employees.
I wouldn’t call most of those Amazon, FB, YouTube etc, people the actual smart people either. They’re mostly just lucky. What made Facebook or YouTube successful over any other competitor? Just luck that their design turned out to be the one people like more?
They mistakenly think their success is due to how skilled or smart they are they think they’re hot shit and their thoughts are gold. But most of them are just like Elon Musk: average intelligence people who got lucky enough to climb to the top of the pile.
The same is true for most software people. We think we’re super smart because we have logical thinking and understand a complicated thing that most people don’t, but then you can always get a good laugh reading the HN crowd try to talk smart on other subjects like physics / quantum mechanics.
A ton of skill, talent, adaptability, and mountains of hard work are still prerequisites for "getting lucky" in that way though. Just because luck plays a big role doesn't make it the only factor.
> The same is true for most software people. We think we’re super smart because we have logical thinking and understand a complicated thing that most people don’t, but then you can always get a good laugh reading the HN crowd try to talk smart on other subjects like physics / quantum mechanics.
Talking out your ass about subjects you don’t understand isn’t limit to software people. It’s funny you mentioned physics because really smart physicists would frequently spew all kinds of stupidity about software when I was in grad school.
Not all physicists. Some are pretty chill. In fact a physicist I worked with was the one who clued me in to the whole "lots of physicists think they know everything" joke/not-a-joke thing, he thought the whole situation was very funny.
He didn't need insights about education. Just needed to hire 5-10 profs with significant industry experience and ask them to create a curriculum. But from the stories it seemed like a bunch of amateurs were playing the move-fast-break-things game.
This doesn’t seem limited to that particular boot camp, sadly.
I’ve instructed at two boot camps (one in North America and one in Europe). It seems to be standard practice in the industry: inflating placement numbers, very low quality material/curriculum and course material, a kind of omertà where students fear speaking up, admitting students who clearly don’t have the skills and will drown in the course, stringing you along “it’ll get better you’ll see” until you pass the number of days where you can’t drop out without losing a significant chunk of money, counting the graduates cum instructors towards your graduate placement rate…
From my experience, boot camps are mostly scams. Maybe they will be a reckoning, it really sucks that the business model basically revolves around deception and taking thousands from people who want a career change.
It’s really sad. My good experience at a boot camp seems the exception.
We had a curriculum designed by people with a background in education, externally audited placement rates, an exceptional alumni network, instructors and mentors with industry experience. Most importantly, it was a non profit.
It seems like there is something to be said for intensive vocational education. It’s a shame that there are so many people taking advantage of students.
I'm surprised bootcamps are still around; I hear so little about them today. I figured they'd mostly closed shop considering the glut of layoffs, LLM fears, end of ZIRP etc.
> They promised career guidance, including having a career councilor, but I never got one. They kept telling my cohort we would get our councilors after this or that milestone, but when we got there they would move the goalpost again. The closest we got was a resume course that was not relevant to tech at all and a resume review by another student.
> They then started billing me for it because I was working in tech, in the job I had for 6 years before I ever even started their program.
This is similar to the bootcamp I saw up close. They promised placement help, making it sound as if they had a strong incentive to help students succeed, but in the end all they did was have someone comment on their resume.
Eventually the student got a low-paying job based on their previous education and the company took a big chunk of the income. The job was unrelated to the useless and poorly executed instruction, yet they still got the money, because they had a signed contract.
This is no better than the guys that make money on phishing attacks. Just a different form of scam.
We were constantly sold this idea "we don't succeed unless you succeed." It eventually became clear that they had no commitment to individual success at all. They went from having 8-10 people in a cohort to have 30+ people, and starting new cohorts every week. It also turned out that Lambda was bundling ISAs and selling them off, so they didn't have any specific investment in actual students.
This is pretty messed up - I liked the idea of incentive aligned ISAs (and actually teaching a skill that universities mostly don't), but it still requires someone of good character making decisions ultimately.
The problem is that incentives are definitely not aligned. Once the student signs the ISA, they can put significant resources into helping the student get the best possible job, or they can put nothing into it and take a big share of the income the student would have otherwise earned. Incentives are only aligned if the ISA is based on the additional income from going through the program, and there's no way to measure that.
I think what we've learned is that this can only work if there's an outside regulator, such as an accreditation body, preventing bootcamps from taking the parasitic approach.
That's how it was sold to us. Literally, the recruiter's exact words were "we don't succeed unless you succeed." In reality, they just kept taking in more and more students. When you have your students doing peer reviews and self-reviews, there not a lot of added cost for having more students. So cohorts went from 8 - 10 students to 30+ students. They also bundled ISAs and sold them off without telling the students they were doing it. So "we don't succeed unless you succeed" was patently false. They were getting their money up front regardless.
Yes. The ISA was a good idea. It aligned the incentives of the company with the vocational success of the students. There are several clones of this in India. I assumed that the rest of the details (like curriculum etc.) would fall into place and the thing would be atleast a moderate sustainable success.
I think that's it's the pressure to grow and become a "unicorn" that seems to encourage these kinds of ugly compromises and behaviour. That kind of thing can be just annoying if the company was some kind of social media thing but when you get involved in something as important as education which can have a huge impact on a persons life, you have to be responsible about it. But that doesn't really help the valuations.
I'll have to look into it more now. I had contacted a non-profit that represents defrauded students, but they had stopped pursuing it after a judge threw out their case.
Not a surprise. Allred was basically a marketing shill with no educational background before lambda / bloomtech. Not a surprise then, the claims they make will be borderline fraud.
Thank you for speaking up. This made me recall an interaction[1] I had with Austen Allred, the CEO, on HN way back in Lambda School’s early days. I was skeptical of his claims that experiences like yours were the outlier. His response was that they had a dedicated “student success” team. I didn’t quite believe his claims at the time, but I was willing to wait and see. I guess my instincts were right and that all of the things he’s said on HN very much stretched the truth.
> They then started billing me for it because I was working in tech, in the job I had for 6 years before I ever even started their program.
That's damning. While I get that ISAs are controversial, I didn't expect this kind of nonsense - I wonder how common it was that enrollees were charged for "landing" their old job?
In any case, sorry this happened to you, hopefully this recent ruling will give you some recourse.
Serious question: why not? What out of SV and VC in the past 20 years has shown they have any intention of doing anything the expensive but "good/right" way rather than cut any corner, oversell, overpromise, underdeliver, and literally commit crime to get their paycheck?
> I went to a lawyer and was told it wasn't worth suing, because they required arbitration in NYC, which would cost more than I would save
Could you do me a favour and look if they had conflicts? (Also, who was the arbitrator, AAA or JAMS? Because it shouldn't be more than $5k, and that's an extreme. Also, in most arbitration agreements, the company drafting the agreement pays the filing fees, which could knock off $100 to $3,500.)
I really don't understand this. Surely you can't arbitrate away statutory rights like this? Sorry, I'm not from the US, and this legal feature baffles me a bit.
This is the boot camp school formerly known as Lambda School, that came under a lot of fire in the past for these types of practices, and other issues.
This is one of those situations lending support to the corporate death penalty. Allowing name changes like Worldcom, Spectrum, and so on to write off some liabilities while operating as if nothing happened.
This is a silly idea lobbyists love because it sidesteps the actual corporate-destruction mechanism: liquidation to pay massive fines, license revocation and/or personal liability for senior management.
Consider even the penalties here, which effectively ban Allred and Lambda from doing business. If you corporate death’d them, the contracts and assets would still exist. Allred would be unpunished. Everything would go back to shareholders who were presumably fine with the status quo, and would be fine putting them into a new entity that Allred could manage. Okay, so you cancel the contracts. Now the janitor who hasn’t been paid in two months is screwed. Okay, so you exempt employees. Allred’s an employee! Exempt him? What do you even pay the janitor with? Okay, exempt some assets. How many? How do you choose who must keep paying versus who is let off? Maybe pro rata? Who will administer all this? Et cetera, et cetera.
Contrast that to a massive fine. Company goes Chapter 7 and into a deep body of law that has experience dealing with the above. (Ideally paired with a license revocation from any lending for Allred and the entity, in case they try to Chapter 11.) Shareholders are wiped and free to pursue Allred. Allred and Lambda are neutralised.
Everyone I know who speaks about a corporate death penalty includes liquidation to pay pack victims. I've never heard someone argue for the corporate death penalty without "liquidation" and "license revocation and/or personal liability for senior management."
The difference between this and a big fine:
* Lots of big fines aren't big enough to actually kill companies that deserve it,
* Fines tend to go to the government, while companies that deserve a "death penalty" often have victims who could use that money,
* Bankruptcy doesn't prevent people from starting another company, or board members who failed at oversight to join another board.
> Lots of big fines aren't big enough to actually kill companies that deserve it
Neither is a corporate death penalty. You’re just shuffling around assets and making work for lawyers.
> companies that deserve a "death penalty" often have victims who could use that money
Why the extra steps?
The closest we have to a death penalty is license revocation, e.g. Arthur Anderson [1]. Victims got screwed. Taking it further and the death penalty analogy seems appropriate--death penalties aren't about restitution. They’re an instrument of retribution.
> Bankruptcy doesn't prevent people from starting another company, or board members who failed at oversight to join another board
Neither does a corporate death penalty. That’s what bans are for.
Corporate death penalty is a gift to corporate America. It sets activists running in circles over a stupid idea that represents simpler, precedents punishments with the ambiguous baggage of extra steps.
> If you corporate death’d them, the contracts and assets would still exist. Allred would be unpunished. Everything would go back to shareholders who were presumably fine with the status quo, and would be fine putting them into a new entity that Allred could manage.
This is wrong for a variety of reasons:
(1) The corporate death penalty is proposed as an additional remedy, not an alternative remedy, to personal liability for officers, etc. (in fact, many corporate death penalty proposals would make additional personal penalties for corporate officers available as a part of that on top of any that would be available independently of the corporate death penalty for their actions, e.g., in one proposal for a federal charter revocation law, “The statute should specify that, for a period of five to ten years, the directors of the condemned corporation could serve on the same corporate board together only when they are a minority, ensuring that that set of directors would not form a majority of the board of another corporation. Similarly, key senior officers should be prohibited from working together for five to ten years. In addition, no director or officer could serve on the board or work for any corporation affiliated with the parent corporation of the convicted corporation. Courts must be empowered to issue injunctions to enforce these rules, preventing reconstitution of substantially the same corporation under another name.” [0])
(2) Corporate death penalty proposals tend to include proposals for how dissolved corporations are to be wound down that address the concerns you address (like a bankruptcy, these would be generally be administered by courts, probably most normally the court issuing the penalty.) From the same proposal, “The dissolution of the corporation should impose the harshest penalty on the corporate entity itself, directors, and officers, while only damaging shareholders-who have less control over corporate misconduct-to the extent necessary to incentivize them to take an interest in the corporation’s criminal misconduct. […] the penalty should dissolve the corporation with as little impact on innocent parties–employees, consumers, suppliers, and the larger economy-as possible.” [1] The proposal goes on to propose that an corporation subject to the corporate death penalty should have a court appointed “czar” take over management of its assets (similar, in a way, to a bankruptcy trustee), operating them and preparing and organizing them for sale (by default, by auction, but by other means where appropriate), with a specified distribution of the proceeds: “The statute should specify that revenues from the sale of the corporation’s assets first pay court costs and the costs of the czar’s operation during dissolution. Next, nonmanagement employees of the corporation that have clearly suffered harm due to the dissolution, such as being rendered unemployed, should be compensated through a one-time stipend. Finally, the balance should be distributed among the shareholders. In this way, the affairs of the corporation could be wrapped up in an orderly and just way that would protect innocent parties while only causing minimal harm to shareholders.” [2]
(3) As with personal sanctions, the corporate death penalty is proposed in addition to, not in replacement for, criminal fines and restitution, and civil damages that may be available. The key difference between corporate death penalty and bankruptcy is that the corporate death penalty can punish directors and officers, and it de-institutionalizes the firm in much the same way as bankruptcy, but it does so even if the amount of the monetary penalties would not render the corporation insolvent.
I’d go so far as to say that the officers should be barred from working in the same industry for a couple of years. Long enough that whatever edge they had is eroded by time. It might be extreme, but adding a “curse” aspect to officers’ careers would act as an additional deterrent.
> officers should be barred from working in the same industry for a couple of years
"The Bureau’s order permanently bans BloomTech from all consumer-lending activities and bans Allred from any student-lending activities for ten years" [1].
> corporate death penalty is proposed as an additional remedy, not an alternative remedy
Corporal death penalties aren't an additional remedy--they're the ultimate remedy. The branding sucks.
> to personal liability for officers
Just do this. Why the extra steps?
> Corporate death penalty proposals tend to include proposals for how dissolved corporations are to be wound down that address the concerns you address
So does bankruptcy, a precedented mechanism.
> the penalty should dissolve the corporation with as little impact on innocent parties–employees, consumers, suppliers, and the larger economy-as possible
How? You're putting their employer, vendor, customer and taxpayer out of business. (If not, what are we talking about?)
> but it does so even if the amount of the monetary penalties would not render the corporation insolvent
Increase the fine.
More pointedly: if you can't justify a fine or penalty more than the company is worth, maybe--on the net--they shouldn't be poofed?
Criminal companies should take every opportunity to shift debate around fines, penalties, license revocation and personal responsibility to one about a corproate death penalties. You get the baggage of the corporal death penalty for free with a heaping spoonful of ambiguity. While everyone debates what common punishments this Rude Goldberg replaces, you can slink away. Worst case: if they do enact it, it's so novel and convoluted you can probably buy a decade of appeals before you have to give up the assets.
Fines are money. Charters paperwork. We're currently seeing a charter revocation example in the Trump fraud trials [1]. It is by far the least meaningful part of the penalty. Could Trump trade the fine for the revocation, he would take it--anyone would.
Or you could just toss people in jail. This case is clearly wire fraud if the company knowing provided fraudulent hiring rates to get people to pay money for a service.
Because of diffusion of responsibility, wherein the person taking the fall was only one of perhaps three dozen individuals who collaborated to make the relevant business decisions.
If you to set the precedent of consolidating the consequences and doling them out to the relevant executive officer you’ll end up with c-suite executives around the country throwing their personal and corporate influence into getting that precedent neutralized.
How doed charging executives in addition to fining a company an amount that puts the card company into unresolvable bankruptcy lead to "diffusion of responsibility"?
Yeah, rich CEOs and investors are opposed to taking any responsibility for their actions, but that doesn't we shouldn't try to hold them responsible.
It doesn’t lead to a diffusion of responsibility, the diffusion exists independently by nature of how a business operates.
A CEO will green light high level strategic direction, but the crimes described here could easily emerge from the implementation of that directive at lower levels of the company. “Plausible deniability”
I mean, I agree with the sentiment but good luck codifying that in a law that won’t be abused to convict innocent people who were convenient patsies while letting guilty ones walk free due to the “subjective” nature.
As far as my cursory glance at wikipedia has informed me, the act itself works around the “plausible deniability” by requiring certain disclosures containing factual information be signed off by key executive staff rendering it impossible for them to say “I didn’t know!” with regards to specific material information.
The blanket concept of holding executive staff accountable for the wrongdoings of the company would mean a lot more disclosures, forms, sign offs, etc. for “any” eventuality that would render the position pointless as they wouldn’t have any time to actually do anything useful.
Because at the end of the day how do you prove that joe schmoe CEO actually fostered a culture that resulted in criminal acts? This isn’t even mentioning the individuals who were actually involved and directly culpable.
I worked for a recruiting firm in the past (first job out of college) that changed its name every 5-8 years. After I'd been there 2ish years I finally got an answer WHY they did that. Basically, they would build up a bad reputation and the easiest way to get rid of it was to just change names. Most companies that disliked them wouldnt associated the old name with the new name.
Shockingly it worked. Some companies that would have never worked with "oldCompanyName" were happy clients of "newCompanyName".
Letters in foreign languages seem capable of enough distinctiveness to be registered trademarks to me, like Alpha Security, Delta Airlines, Kappa clothing.
This is the school to coordinated with /r/learnprogramming to advertise and trick people in to registering, and when called on their bad practices, worked with the sub to ban users.
The sub continued to deny a connection to the school, but I still don’t believe it.
What's the parent post? People who aren't logged in with a Twitter account just see the words "Lambda School", because Twitter no longer shows any replies or parents.
In January 2020, as news broke about Lambda School's scummy behavior, Graham gave Austen a pep talk which he later expanded into the essay, "Haters." It has aged like a fine milk. https://paulgraham.com/fh.html
> There are of course some people who are genuine frauds. How can you distinguish between x calling y a fraud because x is a hater, and because y is a fraud? Look at neutral opinion. Actual frauds are usually pretty conspicuous. Thoughtful people are rarely taken in by them. So if there are some thoughtful people who like y, you can usually assume y is not a fraud.
I guess all those folks calling these guys "frauds" weren't "thoughtful" enough.
I wish PG was right about this, but there are plenty of examples of frauds that were not conspicuous and took in lots of thoughtful people (Bernie Madoff being one of the most obvious and public examples).
This is pretty poor writing by PG here. What is "neutral opinion"... fact? Or the people who answer "I don't know" in political polls? And saying "Actual frauds are usually pretty conspicuous" is silly. If an attempt at fraud were really obvious, it wouldn't trick many people. The big frauds are the ones that are outwardly plausible and therefore trick lots of people.
(Edit: I've been informed on a side channel that non-disparagement clauses can no longer be enforced. IANAL--can someone elaborate?)
As someone who was a low-ranking insider at Lambda some years back, it was my perception that the people calling Lambda out presented a mixed bag in terms of veracity.
Someone here commenting on this story said that Lambda counted their student TAs in their employment stats, for example, but to the best of my knowledge this never happened. There were a handful (like three or four that I know of) that we did hire as full-time staff doing real jobs, and I'm pretty sure we counted them as employed, but not the student TAs.
With respect to this ruling, it says that students were subjected to up to $4,000 finance charges. I hadn't heard of that at all. Reading the details, it turns out that's the difference between the published upfront cost of paying Lambda versus using an ISA. The upfront cost wasn't hidden; it was published right next to the ISA cost. But because they weren't the same value, and it was probably more expensive to use the ISA, they called the difference a finance charge. Which is fine, but if Lambda had simply not allowed people to pay upfront, there wouldn't have been a "finance charge" to complain about. In other words the finance charge was already published in the rules for how the ISA would be repaid. So, factually accurate, but a strange thing to complain about, like complaining that the upfront cost of a house is lower than the mortgage cost.
Still others complain about the selling of the ISAs to investors, and say that that means that Lambda would still make money no matter how well their students performed. However, this would be a very short-sighted strategy as no investors would buy the ISAs if the students weren't performing. So selling them didn't really remove any of Lambda's impetus to place students in jobs. (It did improve the cash flow situation, however, which is why it happened.) From what I saw, the goal of placing students was ever-present regardless of whether or not Lambda was currently selling ISAs.
My point is, there's a lot of information out there by a lot of people who aren't sure about what they're talking about. And it can be tough to know what's real and what's not.
One thing I can say with certainty is that all the instructors who worked there back in the day were absolutely fucking passionate about getting students into jobs and changing the world, in that naive startup way. Some of the success stories from those early cohorts are the things I'm most proud of in my entire tech and teaching career.
As part of my layoff agreement, I had to sign a non-disparagement clause to get my severance.
“… all the instructors who worked there back in the day were absolutely fucking passionate about getting students into jobs and changing the world”
100%
The fundamental concept had merit, but the business had a very very low probability of succeeding financially. Once the financials flipped, the original mission went out the window.
I’m proud of the work I did there and I know we gave many students great opportunities. It was sad, but not surprising to see it go so wrong. But for a time, for many students, good things happened.
> Someone here commenting on this story said that Lambda counted their student TAs in their employment stats, for example, but to the best of my knowledge this never happened. There were a handful (like three or four that I know of) that we did hire as full-time staff doing real jobs, and I'm pretty sure we counted them as employed, but not the student TAs.
That's true. A source of confusion is that the school did hire at least one bootcamp graduate as an instructor, though he graduated from a different bootcamp. And it's worth pointing out that the marketing material promised world class instruction, and a fresh bootcamp grad with zero industry experience is the very opposite of that. For that matter, the head of the data science program was the CEO's brother, whose only industry experience was from a no-name company in Utah.
> With respect to this ruling...
It's a waste of time to argue the semantics of income share agreements at this point. They always operated in a gray area, which is why Lambda School hired lobbiests to try to make them officially legal. That effort failed, and the law has decided they're just another form of loans with convoluted hoops to jump through.
I imagine that they got that $4,000 number from all the people who attended the program, received zero practical skills to get jobs, went on to further training (another bootcamp or even an associates degree) and still had to pay back the company because the terms of the ISAs lasted anywhere from five to eight years.
> Still others complain about the selling of the ISAs to investors, and say that that means that Lambda would still make money no matter how well their students performed. However, this would be a very short-sighted strategy as no investors would buy the ISAs if the students weren't performing.
Given the ISAs disappeared from the marketplaces that resold them to hedge funds, that sounds like exactly what happened. The issue is that it fooled prospective students into thinking, "Hey, if this company is able to run off ISAs, the program must work!" In fact the company made money by leaving hedge funds as bag holders.
> My point is, there's a lot of information out there by a lot of people who aren't sure about what they're talking about. And it can be tough to know what's real and what's not.
The same is probably true of Bernie Madoff, Charles Ponzi, and Sam Bankman-Fried. When someone acts like a sociopath for long enough, people start to assume that everything they do is unethical. There is a long list of crimes that the company committed which have been verified from multiple sources. A few people on the internet getting the details wrong doesn't invalidate that.
> As part of my layoff agreement, I had to sign a non-disparagement clause to get my severance.
They did the same thing to students who scrounge together the money to hire a lawyer to get out of their ISAs. These students had to any reference to Lambda School from their LinkedIn profile and tell nobody about what happened. While you did it to make money, imagine how it would feel sign away your right to free speech for fear of a $30,000 debt.
> I imagine that they got that $4,000 number from all the people who attended the program, received zero practical skills to get jobs, went on to further training
But to be clear, that's not where they said they got the $4000 number. It would be one of those things that'd be nice to correctly know. Do ISAs come with a hidden $4000 fee? The answer: no. Did they have to pay $4000 more because of additional training? No. Did the ISAs last 8 years? No. (At least not for any of the years I was there.)
> Given the ISAs disappeared from the marketplaces that resold them to hedge funds, that sounds like exactly what happened.
I have no knowledge of their final disposition, whether or not the purchasers realized gains on the ISAs.
I know other companies like App Academy and Launch School have had successes with ISAs. For me, this is the real pisser of all this. I think done right it's a workable, useful model, but it got dragged through the mud here, and now we're left with the same old bullshit loans that are fucking the country over. I don't care about Lambda, but I really wish ISAs had been worked on to greater effect globally and hadn't gotten this tarnished image.
> A few people on the internet getting the details wrong doesn't invalidate that.
Of course not. But it also doesn't make the wrong details right, or something you should believe, which is what this subthread is all about.
How can we be expected to make any learned decisions about these sorts of financing instruments if we're throwing bad information in with the good?
I'm the founder of Launch School and I have been thinking about ISAs, coding bootcamps, and software ed for over a decade. I've tried to insert my thoughts here and there, for example:
Thanks for replying! The reviews of Launch School are impressive.
I think you're dead on with that first link. I've heard of some schools that did not apply an effective filter up front, despite instructor pleas, and suffered for it greatly with lowered job placement, ultimately failing with the ISA model.
I feel there's a class of students for whom ISAs are perfect, and, just like you said, a class of students for whom they are ineffective. The ones where the ISA works and standard school is out of reach have incredible success stories.
I found something similar when I taught a nearly free C++ class. I put a really simple test on the front with a refundable $20 fee (if you took the course). Everyone who ultimately took the class was really motivated. $20 was all it took to filter. $5 might have even worked since I speculate the effect is psychological, not economical.
The second link is good food for thought, some stuff I hadn't considered. If the ISAs are sold cheaply enough, you really don't need much student success to get a return.
IIRC, in Lambda's case, the ISA sales were stopped while the company was still young (having gotten another round) [caveat: I didn't have much visibility into this side of things], and anecdotally I think they had some of their biggest successes early on, but I agree with your points on this.
One thing that really impressed me about Lambda was how diverse in every respect the student body was, people from just every walk of life. Waaay more so than I'd seen at any university. I credit the ISA for making this possible.
One of my missions in life is to enable people to get the training they want to get. ISAs were wonderful in that regard.
I think you have to be careful about looking at the diverse student body as "giving them an opportunity". For example, predatory for-profit universities specifically target low-income minority populations not to serve them but because they make for easy prey[1]. I'm not saying Lambda or any particular bootcamp is in this category, just that having a diverse student body isn't a feature unless you know for a fact that you're helping 100% of the students.[2]
Education has a couple of unique attributes that makes it difficult to assess:
1. the value cannot be perceived until much later after the service is rendered
2. alternatives are mutually exclusive; eg, people usually just attend one university or coding bootcamp, not all of them (or even two of them)
This is in contrast to, say, a restaurant where diners can immediately determine if they like the food and can compare it with competitors (because they dine at all the restaurants).
Those two attributes make it very easy to lead with hype and marketing and vulnerable people are particularly susceptible to it. imo it's not appropriate to deploy the standard startup playbook in edu, especially if you find yourself attracting vulnerable students.
Ok, now combine that with ISAs, which has some positive qualities but are not as incentive aligning as marketed. And then if you sell the ISA in bundles, then it becomes even less incentive aligning. Well, I guess it's now aligning with investors and loan brokers. But it's certainly not aligning more with student outcomes.
It all makes for a very delicate situation where you have vulnerable students biting on the ISA bait.
I know it seems like I'm just complaining but I've been thinking about these problems for a long time and I come with solutions. Or, particularly, a solution: imo the best thing an edu institution can do is allow students to leave easily.
Why do we never think of restaurants as predatory? The idea is ludicrous to even consider. There are of course terrible restaurants but we can just not dine there again and eat elsewhere. There are lots of restaurants around.
And here's the issue: there are also lots of edu institutions around but every single one of them deploy the marketing->entrapment playbook.[3]
How does marketing work when you have a bad school? Because of the time-lapse between value received and service rendered. The ISA is easily abused in this environment because it's both the marketing and the trap.
Anyway, I'm just riffing here... btw, huge fan of your books and work! Despite what I wrote above, I knew Lambda was making an honest attempt at their curriculum when they hired you.
[1] https://failstatemovie.com/
[2] imo, edu institutions need to be judged on how they treat their most vulnerable students, unlike startups who are judged on their best wins (https://twitter.com/cglee/status/1781129096250179640)
[3] https://medium.com/launch-school/educational-entrapment-f5cc0472051e
I agree with you on the dangers of targeting minorities. My thinking is still, though, that there is a category of people well-served by ISAs, and those people are underrepresented in schools with traditional payment models.
I've often thought that anyone can be a dev--if they want it. Meaning, it has to be someone who likes the material enough to put in the effort. It doesn't matter if you're smart enough; it only matters if you're going to put in the time. There's a reason I'm not a CPA. I'm absolutely smart enough, but eff that!
And lots of times schools do advertise "we guarantee you a position in a high paying job if you just put your ass in that seat for 6 months". Who wouldn't want that? But they leave off the "you gotta want it" part. And then people get trapped.
Related to "easy to leave", we fought to filter the front-end heavily for people who "wanted it". And we fought to allow students to attend for as long as possible with no obligation. The goal was to allow them to discover if they wanted it. However, this was not realized while I was there. So much more I could say here about how that didn't happen, but I'd wager you have a pretty good guess.
Hand-in-hand with wanting it (IMHO) is having a comprehensive, heavy-hitting curriculum. The guy who hired me left Lambda ages ago, but he and I came up with a list of things people should learn to be decent devs... and that was one helluva list. Needless to say, not all of it got covered, and as time went on, less and less of it did.
I love that California community colleges are now free. Easy to leave!
I really appreciate the conversation, btw. I also like geeking out about this topic, and it sounds like I could learn a lot from the ground you've already covered. I'll check out the reading after I finish prepping for class next week. (0-1 Knapsack and dynamic programming. Phew.)
We have a saying at Launch School: habits over enthusiasm. I've noticed that wanting it isn't enough. Desire is fine but what the real key is a commitment to studying. I think we're saying the same thing with different phrases.
Agree that ISAs can be useful. But it's a tool that can be used to harm or help. Elevating it beyond a financial tool to some sort of educational breakthrough was a disservice, imo.
We agree on the value of community colleges. I wish they were better funded and more people worked to drive CC graduates to six-figure jobs.
I am the founder of BlueWave Labs - we accept junior developers and UI/UX designers to give them Canadian experience by building open source products, to help them land their full time IT jobs and would love to talk to anyone who has put some thought on bootcamps. BWL is a bit different from bootcamps but the main idea is the same: to help people land full time jobs.
Graham also wrote Crazy New Ideas[1] in response to criticism of Mighty, in which he claimed that if "reasonable domain experts" propose an idea it can't be crazy.
The more we see the legacy of PG’s various protégés and “thought leadership” out in the world the more I start to think Jessica Livingston might have been responsible for much more of YC’s successful trajectory than people realized at the time.
> Thanks to Austen Allred, Trevor Blackwell, Patrick Collison, Christine Ford, Daniel Gackle, Jessica Livingston, Robert Morris, Elon Musk, Harj Taggar, and Peter Thiel for reading drafts of this.
Even his comments on programming are…questionable. He spent years hyping up Arc, his “hundred-year language”, and in the end it arrived as…Scheme with some shorthands?
I thought the idea behind lambda was good I was a lot more surprised by PG's strong support for Mighty which seemed a lot more bizarre. Though his recent tweets wrt Israel have been the most disappointing for me.
Lambda School and Mighty having the biggest PG cheerleading support of anything else kind of seals the deal. You can be great at something for awhile but youll always lose the zeitgeist eventually.
Not really "pinpointing" when those two were 1/2 of any specific startup mentions: "check out this amazing startup that has a whole lot of haters." How many startups have an entire essay written in support of them? https://paulgraham.com/fh.html
PG stepped away from YC 10 years ago to raise his kids in the English countryside. I don't see what seems to indicate he has a great thumb on the pulse of Silicon Valley startups in 2024.
Yeah the Mighty situation is when I started to question PG's decision making. Obviously he's super successful and has helped companies worth hundreds of billions of dollars succeed and grow. But even Steph Curry has off nights.
Mighty always sounded like a bad idea. But when I saw PG really making a big deal about it I followed Suhail on twitter because I just had to see what PG was going on about. From what was posted online it sounded like the company was super successful and growing, and I still didn't get it. And then it went under, without any fanfare. Just poof.
Suhail was lying to himself constantly on his Twitter. He believed reality different. PG talked with Suhail and thought, well Suhail is posting publicly and telling those he knows and I know things are going well, so things are likely going well. Because who would lie that hard?
But that was Suhail, totally sure in his lie, smart enough to change the future, but dumb enough to not see his business sucked.
I don’t think it’s right to be hard on PG or Suhail. People fail and Suhail was very smart, smart enough to hold a fracturing vision together much longer than anyone thought. He looked like a guy trying really hard and probably was.
We should be extremely hard on these people. They have accumulated staggering amounts of money and power and use it to exercise influence over many aspects of our daily life.
As a society we should work tirelessly to hold them accountable and break up their concentrated power when it develops.
That was one of the dumbest fucking startup ideas most people had seen in awhile. Many just sort of said the obvious out loud, which is that it made no fucking sense as a business, and then all these rich supposed geniuses tried to shout them down.
Even by the usual standards of the genre that one was a head scratcher.
What do you see being disappointing about tweets on Israel?
I've mostly seen him care about Palestine civilian deaths but I can't say I've read and remember 100% of his tweets.
While I don’t think Lambda School is good, did they actually ever collect on any students who didn’t get jobs?
It seems kind of important to the premise. These things may have been loans and had a finance charge or whatever. But if you can “default” and nothing happens… what are they really?
The contracts in the early days lasted up to five years, so people who went on to further training (e.g. associates degree at a community college) still owed money even though Lambda School had zero role.
Later, they extended it to eight years and removed the “tech job” stipulation. I read one account a guy owing money who worked as a mailman.
That’s scummy but it sounds like they could have achieved the arrangement “pay a share of your income wherever it comes from” without a loan.
The important part of this is a loan gives you rights as a creditor that an ordinary Accounts Payable does not. Did Lambda School’s creditors ever exercise those rights? If not, how important is the existence of a finance charge or APR or whatever? I mean, if it is only a loan for the purpose of being a product for banks, but functionally is just a, whatever, a payment plan: man, the CFPB is basically complaining about annual billing versus monthly billing discounts, bundling, and any number of psychological tricks. Scummy yes, but dramatic? No.
The peons and peasants with their pesky "anecdotes" don't morally matter to these elite club members. Never believe they're on your side although they're good at making it look like they are.
Am I crazy, or do fines never come close to matching damages? Or jailtime? I'm constantly seeing rulings or indictments where an article says "defendant faces $1500 in fines or two years jail time", as if those are in any way equivalent. Were all the fine quantities written up in 1875 and just never got updated?
In this case, defendants are accused of conning "at least 11,000 income share loans" "carrying an average finance charge of around $4,000", but their fine is $164,000? A fraud of $44M just for the financing charges produces a fine of $164K? As I missing something?
The US justice system and regulatory agencies treat corporations with kid gloves. They often get many strongly worded letters and many chances to correct their bad behavior before regulatory action happens, and then when it does happen, it's slow and the corporation usually continues to operate, and then when penalty comes, it's some ridiculously small fraction of the gains that came from the bad behavior, which the corporation usually appeals and gets reduced or thrown out.
There are almost never company-killing fines. There are almost never consent decrees with stipulations that change the company's behavior. There are almost never instances of piercing the corporate veil and going after executives or shareholders. It's a total joke.
There's an incentive problem here because litigation is so expensive. If the fine is large enough, it becomes more and more worth it for the company to fight it in court - and therefore more expensive to the regulatory agency's legal budget. The only folks who benefit from it going to court are private lawyers.
Whereas, settling meets the company's incentives (eliminating uncertainty), meets the regulator's incentives (bad behavior is stopped locally). The moral hazard created by making fraud seem less risky (because the punishments aren't that bad) is born by the public.
The solution here would be to limit the possible legal shenanigans that companies can use to increase the cost of taking a case to trial.
Generally, yes fines are a fraction of damages; fines are meant to deter, and are paid to a regulator not the damaged party. Payout from a lawsuit is meant to capture damages, and pay to the damaged party directly.
In this case, the 'stick' is that CFPB is preventing the company from issuing new loans, de facto forcing them to cease operation. (Or I guess charge regular tuition, like a normal school?) That's a pretty big deal.
According to The Verge [0] "None of this puts BloomTech out of business, by the way — it can keep operating with third-party loans instead."
And to make matters even more depressing the CEO just tweeted [1] that it's no biggie for him:
> BloomTech continues to focus on its core mission: improving the lives of students and enabling them to fulfill their economic potential. While it’s been frustrating, we’re glad to put this behind us.
> Am I crazy, or do fines never come close to matching damages?
Fines aren’t intended to replace damages. If they are criminal fines, criminal restitution is also available through the same process. Even where criminal restitution isn’t available or, for whatever reason, pursued, or where the fines are civil, civil damages for those harmed are not precluded by the fines, they are on top of the fines. Fines are punishment, not compensation.
Those articles you are reading are just poorly worded. For any criminal case, it is a matter of fines AND jail time. You could be sentenced to jail time and no fines, or fines and no jail time (though this is rare), but the majority of the time you get fines and jail time. Generally, for criminal issues, the punishment is really in the jail time, the fine is just extra.
I was involved deeply in tech career volunteering several years back when this was called Lambda school.
Writing was on the wall about Lambda even then based on student feedback from a 100+ student multi year sample size in the orgs I helped.
Consistently students raised: ISAs coming to much larger payments than advertised. Constantly changing curriculum. The classic one for bootcamps - blind leading the blind with former students teaching the always changing curriculum, and juicing graduation employment stats. If I recall I even broke out the ol’ discounted cash flow math with students to actually sort out what the rate lambda was getting on these ISAs, and ya it was payday loans basically.
But, we saw justification after illogical justification about this setup. Former students employed by lambda getting aggressive. otherwise pretty well-meaning groups who had vendorized tech career support partnering with Lambda, despite seeing the same feedback as I did bc the company leads were in the same groups as I was.
Takeaways from all this if you or people you care about are trying to use these conduits to build a tech career and are evaluating options like Lambda vs a degree and so on:
- market can stay illogical, and same with its supporters, longer than when good, clear as day data about fraudulent (or more politely “very obscure and novel pedagogy approaches”) practices surfaces to counteract that narrative.
- people and orgs who have staked their future on that illogical/fraudulent market will roast their reputations in face of that evidence for much longer than you think or respect
- the feedback that matters should be the primary sources: the students that since 2019 or so started pointing out all these practices in bulk.
It is now 5 years later and who knows how many students who shredded their career goals by depending on schools like this.
We decided to settle the matter because it was clear that ongoing litigation would be extremely time consuming, incredibly expensive, and distract us from our core mission.
We do so without agreeing to or denying any of the allegations in the consent order.
Weird to read further down the thread, where he acknowledges the wording of the press release is legal bullshit, and then employs an entirely different set of weasel words. I can't even sum this up.
As is the intent with most serial liars, no? Twist you up so bad that it quite literally jams up your reasoning ability, making you more susceptible to the con.
The Recurse Center[1] is the opposite of this. They don't take any of your income, they just help you find jobs and companies pay them to find cool people. And there is no curriculum. They believe that if people work on cool things they will learn a lot. I can't recommend it enough!
The "no curriculum" style automatically filters for a certain kind of self learning high achieving student. This is a reasonably guarantee of success and also limits the scale of the operation.
Lambda School is more of an attempt to train the average guy who wants to increase his earning ability. He doesn't have the time or patience to "work on cool things" in the hope of "learning a lot" which is loosely correlated to finding a good job.
They cater to different crowds and solve somewhat different problems.
+1 to this. I attended RC in winter of '18. It wasn't the best fit for my personal learning style, but it's an incredible program for the right person.
I highly, highly recommend it to anyone considering going there. Some of the kindest and smartest people you'll meet.
Are there any legit income-sharing schools of this type, tech or otherwise? Done fairly, it sounds like an interesting alternative to upfront tuition.
On the surface it doesn't seem like a bad model, but of course it could be twisted to evil ends. From the article:
> The loans carry substantial risk, as a single missed payment triggers a default and the remainder of the $30,000 “cap” becomes due immediately.
> Students were therefore deprived of rights they should have had when their “income share” loan was sold to an investor [without the required Holder Rule provisions transferring legal responsibilities to the new owners].
The math ends up wildly unfavorable unless you are EXTREMELY confident in your teaching/transformation abilities.
If you look good on paper before the school then you don't need it and won't be motivated to share your income. So the applicant pool reduces itself to those who on-paper don't have great chances. So you need to cause a really big delta in the ability of those people to make good money in the industry for you to be able to get your cut.
And you're gonna pull that off in 6 to 9 months? I'm a big believer in a lot more people having potential to learn than currently have easy opportunities, but that's a hell of a timeline.
I remember the marketing for App Academy was that we all would be self-taught, but then the actual makeup of the cohort were people who had prior programming experience (CS all through high school and as a hobby, but studied linguistics in college and regretted it; a designer who had done some JS and couldn’t pass leetcode interviews despite having current frontend skills, etc.)
I think the problem they’ve run into is that there are only so many of those types to go around, and you have to stay small or really tackle the problem of transforming someone in 12 weeks eventually. That’s a different and much harder ask.
Yup. When the Bootcamp market flourished (early/mid devBootcamp days) and incredible results seemed common it was exactly for the reasons you mentioned. Many early attendees were folks who either had some previous technical experience or were very smart and proved in some other field but wanted to move into dev work.
Eventually the majority of those folks who were going to make the switch... Did. Then the average bootcamp graduate became someone who bought into the hype that anyone could learn to code. A lot of truck drivers, CS reps, and teachers applied. There nothing stopping those people from becoming great engineers. But they are going to have a more difficult time on average than the person who dabbled in coding for ten years while working as an engineer in another field and just needs a crash course to be proficient in web development.
Placement rates dropped significantly around that time.
They literally ensured their success by filtering for people who would already succeed no matter what. I don't have any misgivings about it because the curriculum did help me focus on some gaps in my understanding and build up a profile/portfolio that could land jobs.
It's still expensive and had that curriculum been open at the time I could have done the whole thing on my own and saved some money.
The social aspects of the program didn't end up really benefiting my career at all. The vast majority of my cohort had STEM degrees from prestigious places or were people who were programming since an early age like me. I had already had a long career in IT before I attended. 100% did get jobs, but 2 of the guys in our cohort struggled for a while -- though I think that was to get out of paying the ISA.
Not necessarily, fresher or graduate trainee programs are this effectively.
Large companies especially conglomerates do this by hiring freshers and investing in their learning and benefit by paying a bit lesser than the market over the years .
Apprenticeship has also been successful economically at even a scale of one master/sole proprietor for centuries.
The key is to derive value while they learn, not split the learning and earning parts completely
There was a time about 5 years ago where tech companies were desperate to fill various minority quotas. The idea was those people were very valuable, there were very few applicants who were hotly contested by other tech companies, and lack of skills wouldn't matter - they'd learn on the job.
In that world, the school only has to get the students to do a "hello world" in python and apply for the right jobs. Such a school is very cheap to run, and very lucrative as long as a decent proportion of students fit into the desirable categories.
The students themselves usually aren't aware how desirable their application is - and therefore believe the school is their route in rather than a few youtube tutorials and a direct application.
Thoughtworks wrote in an email to me that they were only considering non-male candidates because of their quotas. The idea, I suppose, is that I should be willing to change my gender if I'm really interested in joining.
If they had quotas, they were made up internally. But more likely they were just lying to you, or the person who sent the email was twisting the truth. I don't think anyone but you thought of the "maybe you should change gender" bit. They just didn't want to hire you, personally.
I spoke to a bunch of lawyers who all told me they hoped I found some lawyer who would do that. The EEOC decided that if a manager directs their reports (engineers) to advertise a position, then people apply to the position as directed by emailing the engineers, then the engineers say some stuff about gender quotas, that's fine, because the applicant didn't fill out some other form and the company disavows this recruitment process to the EEOC while using it to source candidates.
Not that you’re arguing for or against, but I thought I’d drop an interesting link to a 2020 McKinsey and Co study that shows more diverse companies generally outperform their peers. [1]
Is there any wonder that Google and other (not exclusive to tech) companies desire this?
Plenty of recruitment teams get given targets. Just one 1 memo saying "hires that don't bring the company towards our diversity goals won't count for your metrics"...
> Are there any legit income-sharing schools of this type, tech or otherwise? Done fairly, it sounds like an interesting alternative to upfront tuition.
investing in startups is kindof like betting on the future potential of founders, though it's tied to a business idea.
Upstart started as a personal loan for students and expanded to other financial services, it went public recently. They innovated by doing the regular thing (student loans) better than the competition, rather than trying to be both the lender and the school https://en.wikipedia.org/wiki/Upstart_Holdings
> but of course it could be twisted to evil ends.
My speculation is that this was a 'road to {} paved with good intentions.' Just like most startup products face challenges in the real world, it sounds like the Lambda School tried everything they could to get high job placement rates, but weren't able to deliver at scale.
Then, as their early placement % dropped, they just didn't change the numbers in their marketing materials. After a certain point their early hopes and reality diverged enough to constitute fraud in the eyes of the CFPB
Anecdotally, we get a lot of applications for any software job posting, and I discard most of the resumes of recent bootcamp graduates. It's nothing against bootcamps, it's just a signal that the person is a junior engineer. And in the cases we have hired people with less work experience for junior roles, we've had a much higher signal-to-noise ratio in our interview process talking to people who completed traditional education (even if it was not directly a CS program) and have enough of those applicants as-is.
The income based repayment plans for federal student loans are not that different (but without most of the sketchy practices).
The fact that those are an option for accredited schools means I think it would be hard to make it work in a program like this. Especially if there is any sort of venture interest expecting actual returns. Actually educating people well is not cheap and I have not seen any of these programs that actually do anything innovative either.
App Academy (in a much hotter 2013 job market) honored its 10% of my first year’s salary ISA when I attended. Anecdotally from my cohort, they worked with people on missed payments without triggering a balloon repayment.
This isn’t the same type of school, but Purdue was an early experimenter with ISAs. Sounds like as of 2022 they’d paused new enrollments. [0]
As I recall, some critiques were that it was only deemed viable for a small range of STEM majors, and narrows the mission of the institution toward building earning power vs. providing a well-rounded education, being an intellectual/research hub for the community, etc.
Yes. Most states have a system where students attend school, receive an education, and pay the school back using a portion of their income after graduation.
They're often referred to as "public schools", and ISAs are often called "taxes".
Those schools still charge you $50k and take 4 years of your time, so I'm not sure how that comparison makes sense, particularly for working folks looking to uplevel their skills.
Those schools have not always charged $50k - that's a recent political choice. I'd point to student loan policy as the main driver [0].
Many bootcamps require full-time attendance, and many universities have part-time options. Further, community colleges are an option if the only goal is skill acquisition. Those programs take less time and are cheaper.
Yes, the one I did. Launch School (their Capstone program) is 1 year 18%ish ISA. Since, when I did it, 100% of my cohort got real-Dev jobs averaging 120k+, the school still got 20k+/student. They're the anti-lambda school in my book. If anything too modest in their marketing. Best decision of my life.
> I attended Launch School and found the founder and the program to be of high quality and integrity and the success of the capstone graduates speaks for itself.
Sorry errant >. It was based on my own experience. Launch School has a unique model where it's $200/month for the core curriculum which you complete at your own pace, and then can complete an optional capstone curriculum/project which comes with an ISA (18K or 18% of first year salary). Their outcomes are great, the curriculum is top-notch, and the founder always conducted himself with integrity and transparency. I had a great experience.
Thanks for sharing an ISA success story. Lots of us who used to teach at Lambda back in the day only did it because we wanted the ISA to succeed widely as a tuition payment mechanism.
That dream hasn't been realized, and certainly wasn't by Lambda, but I still hold out hope.
/Years/ ago, I tweeted something about how companies like Uber and Lambda were privatizing public services. ISAs specifically seem like a privatization of taxes.
Austen Allred quote-tweeted me to his gazillion followers and caused a big pile-on about how awful and wrong and anti-progress I was.
If you look at the founder's backgrounds it makes this seem all the more likely.
Before BloomTech, Austen was a develop for a payday loans company. His cofounder, Ben Nelson, worked as a software instructor, and left BloomTech in 2021. So maybe it's less surprising that the innovation here was in the financing, not the teaching.
> Allred tweeted that the school achieved a 100 percent job-placement rate in one of its cohorts, and later acknowledged in a private message that the sample size was just one student.
Honestly wonder what the true placement rate was. There seem to be some success stories I’m seeing on Twitter but this could have all been avoided had they just been up front.
That $164,000 victim fund sounds pitiful but I do wonder how it is calculated.
> ...with inflated promises of job-placement rates as high as 86 percent, when the company’s internal metrics showed placement rates closer to 50 percent and in some cases as low as 30 percent.
> BloomTech advertised on its website that 71 to 86 percent of students were placed in jobs within six months of graduation, when its non-public reporting to investors consistently showed placement rates closer to 50 percent. Allred tweeted that the school achieved a 100 percent job-placement rate in one of its cohorts, and later acknowledged in a private message that the sample size was just one student.
For the record, it’s actually far worse than this even, as many of your “teachers” are just people from the previous cohort.
After a slew of negative reviews came from a few people that verifiably took the early courses, lambda decided not to improve their course, but instead to do two things:
1) they gave students financial credit for posting positive reviews on social media
2) they paid review shops out of India and China to bombard the internet with fake positive experiences.
This school are scumbags. Frankly I am shocked that it still exists and people still go there.
There's probably a good argument to ignore rule breaking and little deceptive marketing if the student outcomes are good but it looks like in-aggregate that they weren't and that students were better off taking a loan and attending Oregon State's Post Bac in CS or Hack Reactor.
And if you really believe you can succeed as an autodidact with minimal mentorship from previous batches of students, 42 schools[1] offer that for free.
It's shameful YC was still shilling Lambda one year ago[2] even though there's been a mountain of evidence about its deceptive practices for many years.
There's no reasonable argument in favor of deceptive marketing. This idea that we should tolerate bullshit from people trying to make money needs to go away.
If the outcomes are good for the students, there won't be an issue with making them be straightforward about it.
If my math is correct, they scammed roughly $44M from ~11000 people... And the fine is somewhere around $150k? In what universe is that an acceptable punishment? Whoever is running the show here should be thrown to rot in jail for the next few years, not this love-tap they're getting.
The fine is not the punishment. The bans are the punishment. They gut the business model, likely shutting down the business entirely in short order.
Making people whole is what civil lawsuits are for. Which, if I understand correctly, will be much easier with this order and findings in place. That will be some serious financial punishment on top of the ban.
I grew up in Utah which has a certain religious culture mixed in entrepreneurship. Very good salespeople but not always morally right depending on your beliefs. The broadway show “The Book of Mormon” is a good satire as to what I’m talking about. But lived experience is better.
Also I knew of him and his early employees from his involvement in a bootcamp called DevMountain in Provo. Interesting concepts were applied there and their practices were very distasteful in my opinion such as having a previous cohort student teaching the upcoming cohort and inflating LinkedIn recommendations with the current classmates to land jobs.
Like it isn’t wrong to do, but it isn’t right either. Following Lambda over the years showed all of these patterns to larger extents.
When do the enforcements go into effect? My wife went through Lambda in 2020 and still is being hounded by them even though she does not work in a related field. Has to prove salary, show statements, etc. Does this mean she no longer will need to do this?
Vincent Woo in 2020: "Lambda has claimed a 86% student placement rate for years. The real number is probably about 50%." [1]
From the announcement: "BloomTech and Allred lured prospective enrollees with inflated promises of job-placement rates as high as 86 percent, when the company’s internal metrics showed placement rates closer to 50 percent and in some cases as low as 30 percent."
I remember seeing you debate Jason Calacanis from the all in podcast on this week in startups on this exact topic. You are probably one of the most confident, well spoken people I have ever heard on a podcast. You also don't derive your comfort from the people around you, so you didn't feel the need to laugh away awkward moments. It's a great watch. https://m.youtube.com/watch?v=5hUT8VZNvm8&t=3488s&pp=ygUhVGh...
"permanently bans BloomTech from all consumer-lending activities and bans Allred from any student-lending activities for ten years"
"ordering BloomTech and Allred to cease collecting payments on income share loans for graduates who did not have a qualifying job, eliminate finance changes for certain agreements, and allow students the option to withdraw without penalty"
This order seems like a death sentence. If ISAs are defined as consumer-lending, which the CFPB clearly says they are, BloomTech cannot recruit new customers. And they cannot collect on 50% of their outstanding loans (if the quoted internal placement rate is true).
The CFPB, like every federal regulatory agency, has only direct civil enforcement powers.
They refer criminal matters to the Department of Justice, which usually takes significantly longer before handing down charges, and does not usually disclose the existence of an open investigation until and unless it issues an indictment.
The CEO should go to prison. Obviously. This is what's wrong with our society -- too much upside to being dishonest, very little downside. People with integrity are practically punished for it.
YEARS ago (2002? 2003?) I'd done some tech training courses in my town. "Learn web dev" kinda stuff. Was very much a part time thing, but I'd looked in to "hrm... could I make this a business?". And learned about the numbers... and learned about ISAs. If I could get accredited(?) as a certain type of school, I could deal with ISAs with students.
I kept looking at the numbers, and couldn't find a way to make this be ... profitable. The time it would take for competent professionals to spend adequate time with folks wasn't something most people could really afford. So... either get them to take out loans, or do an ISA. Neither of those seemed to make sense for the types of students who might most need this, and... it just left a bad taste in my mouth. I enjoyed the teaching part, but couldn't find a way to make it a good business.
Then years later I started seeing all these bootcamps charging thousands and thousands for what seemed to be garbage (mostly). Left another bad taste in my mouth.
I believe the underlying cause is that the pay-to-learn model itself is not feasible because the value of a good teacher's time cannot be compensated without charging students and ridiculously high fee, and a student can't justify a high fee when the outcomes aren't guaranteed.
Colleges have worked in the past because the outcomes were more or less guaranteed (i.e. if you got good grades and graduated, you would very likely land a job), but even that is no longer valid (outside of regulated domains like medicine, law, etc.).
I predict we will see many, many more pay-to-learn companies, institutions fall in the coming years. ("fall" could also mean become irrelevant, and catering only to those that don't understand how the world has changed and still incorrectly think that such programs will prepare them well).
BloomTech, in order to survive, had no choice but to try and play the games they did, and mislead. It's a byproduct of not having a business that is viable.
>reduces the forcing function for the education to be high quality
Not just the education, but the selection process too.
If the higher-quality inputs are abundant, then the overly-exclusive selection process is somewhat deleveraging of overall potential.
If the higher-quality inputs are scarce, they are outnumbered by others having average-to-below-average potential, who often seek the exclusive membership more so than any actual high-quality performance.
Once again a large percentage of the highest-quality inputs can be systematically excluded in a disadvantageous way.
With good fortune at least a good number of high-quality inputs do gain entrance and it can set a good example, sometimes realistic, sometimes not.
Either way the higher-quality inputs are best identified beforehand, not the result of an overly exclusive selection process.
But it's this type selection process that contributes so much to some institutions' perceptions of quality, when they could be doing so much more.
From the least-prestigious programs all the way up to the most-prestigious, it seems like there is always going to be some temptation to blur the distinction among peers and tiers in a way that's confusing to students, and it's just a matter of integrity whether that is taken a bit too far.
Honestly, there’s nothing really that screams dishonesty than this tweet. Saying that your outcomes are stronger than ever when every tech company was laying off and headcount was frozen just doesn’t pass the smell test.
I'm currently interviewing with them for a position as instructor. Since I'm located outside of the US, I know nothing about them and decided to do some digging, and I'm happy I did. I'm really passionate about teaching, and they have been actually scamming people instead of helping them out. I am appalled.
Bootcamp outcomes reports are always bullshit. I used to work at a bootcamp and spent a few days digging into popular bootcamp outcome reports. Basically they all wittle down the qualifying students per graduating cohort until they have a good number.
Reasons to eliminate a student from your outcomes report:
1. Didnt finish the program
2. Didnt complete "career commitments" aka xx number of applications per week, x number of meetings with career counselors per week, responding to all emails from bootcamp within x days - for 6 months to 1+ year
3. Didnt pay tuition or missed a tuition payment
4. Had too many absences during the bootcamp
5. Received a job offer but turned it down
6. Accepted a job offer that wasnt tech related
7. Graduate just doesnt respond to outreach from bootcamp
The 30%-50% actual placement rate is pretty realistic. I later went through the same bootcamp I worked for and my graduating cohort was probably 30% to 40%.
I don't understand why an Income Sharing Agreement would be classified as loans. They seem more like equity than debt; the amount that students would pay depends on their future income, and can be arbitrarily small or large (right? or maybe I am misunderstanding the terms of these agreements).
I had thought that debt is when you have to pay back at least the "principal" no matter what, and equity is when the financier shares the risk of you failing. Maybe that's not correct, though?
Does the definition of a "loan" include any sort of financing, even if the amount that needs to be "paid back" to the "lender" can be arbitrarily small or large? That would make equity financing a special case of debt.
You can’t hold equity in a person, because that is slavery. All consumer liabilities are thus a form of debt. The characteristics that matter most are whether it is secured, the schedule of repayment, and the schedule of fees (interest being amongst the fees). Everything else is window dressing after those three parameters, and the label you stick on the box matters the least of all. Consequently, undischarged debt is indistinguishable from a loan, which is rather the CFPB’s point.
When push comes to shove, the substance of a thing matters much more than the attempt to relabel the thing.
> Allred tweeted that the school achieved a 100 percent job-placement rate in one of its cohorts, and later acknowledged in a private message that the sample size was just one student.
This is shameful behavior. And to think prominent people were propping him up after so many stories had already come out, all in the name of not cowing to the mob. They all have figurative blood on their hands, and I already know they won't be apologizing to the affected people.
Didn’t know who this guy was but I followed him recently because he tweets a lot about Silicon Valley stuff. (He was suggested by Twitter.) Some of his tweets were a little, let’s say, not grounded in reality, but I’m not on Twitter to pick fights in my legal name. But I am not surprised he turned out to be a scammer.
Yeah it's really hard in both this article and the comments to tell what was actually problematic and what wasn't. A lot of people seem to think ISAs are fundamentally problematic but none of their arguments seem compelling to me. It's not even really clear to me that they did/didn't deliver value. I'm assuming some of this is true, but hard to tell how much -- the CFPB isn't really giving sufficient details to know how much of what they're saying is true in spirit vs legally true political posturing. Regardless, I'll be cautioning anyone who asks me for bootcamp recommendations and is considering BloomTech.
Exactly this. If the CFPB claims are true and the settlement seems to suggest that BloomTech and Austen agree … then the penalty should include clawing back at least half of that 100M no?
Man, I have so much to say about this...where do I even begin.
I attended a bootcamp myself (hack reactor). My experience overall was very good and I owe my (6 figure) income and current career to it - the students and instructors were both impressive. I was in a dead end career and now I have a new world opportunity opened up to me.
But that being said...
I think a couple of things killed the bootcamp model:
- Saturation. Insatiable student demand + no acceptance criteria (anyone can get in) means there is robust market for bootcamps. Hack Reactor (and a few others, like Fullstack Academy and App Academy) mitigated this somewhat bc you needed to pass a (difficult) interview to get accepted.
- Fraud. Bc there is no "accreditation" so anyone could star a bootcamp, including scumbags.
So I have mixed feelings.
Hopefully, the (terrible) job market will flush out some of the shit down the toilette, but I hate that innocents, people just trying to improve themselves, got caught up in the blast radius.
That is probably the end of income share agreements (ISA). If any companies are doing ISA like that, most probably they would have to collect money upfront just like other bootcamps as well.
It's disappointing that California's Bureau for Private and Post-Secondary Education (BPPE) continued to approve this boot camp. I thought the rationale for creating the bureau was to discourage scams in job training.
At first I found it weird that the BPPE can't discipline a company until it's registered and operating legally. So for the first few years, it couldn't do anything. The twist is that until the BPPE approves a school to operate, any student debt obligations up to that point are not valid. In theory, anyone in California who enrolled before August 2020 owes them nothing.
The problem is that Lambda School still tries to service those debts. The victims are usually low-income, so they lack the resources to lawyer up. If they do lawyer up, they end up being forced into arbitration due to an arbitration clause in their student agreements.
So in the end, it does feel like the BPPE is a half-measure that doesn't fully tackle predatory companies.
> If they do lawyer up, they end up being forced into arbitration due to an arbitration clause in their student agreements
You’re literally describing why arbitration works. Someone low income can just file for arbitration with minimal work by a lawyer. Contrast that with the tens of thousands they’d need to pay a litigator.
They split the students to take away their power. They kicked people off Slack, wiping the incriminating message history, and then re-adding students (woopsie), they allowed rampant racism to be posted in the channels. They did so many shady things with arbitration, it was absolutely harmful.
> I went to a lawyer and was told it wasn't worth suing, because they required arbitration in NYC, which would cost more than I would save.
It sounds like arbitration does not work, according to people who had their lawyer look into it for this exact case. What are your thoughts on it given this new information available to you?
That looks like a biased source, concluding in the first sentence of its introduction that "pre-Dispute Arbitration agreements force people into a form of ‘Rustic Justice’ whose primary purpose to evade meaningful accountability for violations of contract or statutory rights" [1].
That said, I do know bank lobbying group who want to outlaw arbitration for unaccredited investors. Will pass this along.
I wrote that page after reading every one of those sources. In full. Including all cited supreme court cases. I actually initially felt that mandatory arbitration was fine and somewhat pro consumer. I changed my mind as a direct result of the research.
To the extent possible id like to strongman arbitration but need to find sources.
That true, but this ends up being a game of whack-a-mole, and even a few thousand dollars is too much for a lot of victims. Recently there was an attempt to mount a class action lawsuit, which would have settled things for everyone in one fell swoop, and it was rejected due to the arbitration clause.
> even a few thousand dollars is too much for a lot of victims
Someone angling to go into coding should be able to do the research to draft an arbitration claim on their own. In most cases that isn’t a fair assumption to make, but given the cohort, they should be able to collaborate on a draft.
The gating part isn’t doing the work. It’s knowing you have the option to.
> Do you think they should have listed “draft an arbitration claim,” on their enrollment prerequisites?
Unless you’re a total numpty, you can learn online how to draft an arb claim. And even if you are a numpty, you should be be to find—in a half-decent cohort—someone who can do this.
The issue is rarely ability. It’s learned helplessness in the face of the legal system. The anxiety, not ability, is the limiting factor.
The company targeted the poor, single mothers, reformed convicts, and other disadvantaged groups. They tend to lack the free time or guidance to navigate these situations. If this work is trivial to you, I am happy to connect you with them to provide your services.
> If this work is trivial to you, I am happy to connect you with them to provide your services
It is. I won't because this isn't something I care deeply about. The question is whether they would have been better off without arbitration, and the answer is no.
The problem is never arbitration. The problem is mandatory pre-dispute arbitration agreements which have, after considerable research, shown to be a negative for consumers. If it were really better you could always select arbitration as a part of the ADR process during during a standard Civil suit.
This is also an area I care deeply about. And have read north of 2000 pages of cases, analysis, and position papers on the topic.
I also have a list of about 90 more documents to read. Slow but steady progress.
In January, a class action lawsuit was rejected by a judge due to the arbitration agreement in the contracts. The whole reason class action suits exist is to save thousands of people from having wage individual fights. If it had gone through, the victims could have done nothing and woken up one day to an email saying, "Your debts are clear."
I honestly can't think of a clearer example of arbitration agreements screwing people over.
Reminder: California passed a minimum wage law for fast food workers that exempts places that make their own bread (ahem, totally unrelated coincidence: Panera which bakes their own bread is a big donor to CA's governor).
". The CFPB found that BloomTech and Allred falsely told students the school’s “income share” agreement contracts were not loans, when in fact the agreements were loans carrying an average finance charge of around $4,000. BloomTech and Allred lured prospective enrollees with inflated promises of job-placement rates as high as 86 percent, when the company’s internal metrics showed placement rates closer to 50 percent and in some cases as low as 30 percent. "
I don't know anything about this guy or his beliefs, but the biggest red flag for me is he has a normal name with weird spelling. I don't trust anyone with this naming configuration.
normal name - normal spelling - ok
weird name - normal spelling - ok
weird name - weird spelling - ok
normal name - weird spelling - no go
I don't want to hear some Jane Austen excuse either.
You might find the book “Palo Alto” highly illuminating. I certainly did.
There’s a lot more consistency in the backstory of Silicon Valley than I realized.
There’s certainly an amazing culture of visionaries and innovation and creative people as well, it’s worth noting that, but there’s a deep history of sociopathic business practices as well that goes back 100+ years and is core to the identity of the Valley in general and Stanford in particular.
CFPB needs to be burned to the ground. How tf is this even constitutionally legal?
It doesn't matter what your political leanings are or what you think about the matter at hand. No agency should have the much power to be the judge jury and executioner. Oh and also to just write laws at a whim.
This is really not cool. I have no idea how anybody who calls them selves an American can be cool with this.
Honestly this ought to be an indictment against the Silicon Valley set as a whole but oh well:
> The investment is largely coming from Gigafund, the VC started by ex-Founders Fund partners in 2017 originally to put more money into SpaceX, with Tandem Fund and Y Combinator (where Lambda School was incubated) also participating. Its list of other backers include GV, GGV, and Stripe. (Tommy Collison, the head of business development at Lambda, is the younger brother of the two Collison brothers who co-founded Stripe.)
Paul Graham, 2020: "Lambda School will teach you programming faster than most colleges. And it not only works well remotely, but was designed to from the start." [1]
Paul Graham, 2022: "Of 1277 students who graduated from Lambda School in 2020 and sought jobs, 950 got them, for a placement rate of 74.8%.
(Lambda's weirdly dedicated haters will be happy to hear that these numbers were audited by an accounting firm.)" [2]
Having something audited by an accounting firm doesn’t make me trust the numbers much more. It’s well known that many accounting firms will give you whatever result you want as long as you pay enough
> Allred tweeted that the school achieved a 100 percent job-placement rate in one of its cohorts, and later acknowledged in a private message that the sample size was just one student.
When confronted about this on Hacker News, Austen defended himself with:
> I did say the hiring rate of a cohort of one student was 100%. And in the same tweet I said, in all caps BUT VERY SMALL SAMPLE SIZE. Odd how that doesn’t make the article, don’t you think?
Aha that’s a gem, it’s like that crypto company listed “audited by <some famous reliable auditor >”. They do not mention they failed the audit, but they “did” get audited.
Or Tether. "We realize - but hope you don't - that 'financial attestations' do not remotely resemble 'audits', but we're going to call this financial attestation an audit". And "If you don't fall for the first, we're going to tell you that we have had audits done but we won't release them because they're in Mandarin Chinese."
"For a few months in 2013, Allred camped out of his car while in Silicon Valley, and frequently describes this period as having been homeless. However, a deleted post on his blog titled 'Voluntarily Homeless in Silicon Valley' explains that he lived out of a car by choice."
I have a friend who is adamant that he lives out of his truck by choice, but it's hard to call it a choice when there's only one option. I wouldn't hold his feet to the fire if he later admitted he was in a rough spot (our friend group is all very clear on this situation). I had put Allred entirely out of my mind for a while, but I seem to recall his "homelessness" was characterized more by image than by practicality. Since we're being technical, it seems worth making the distinction.
I had this same debate here a few months ago, about people living out of their truck/van in Seattle, and the "choice" of it. There was more than one person that could (or would) not see the distinction. "I've seen plenty of social media and YT videos talking about how much they enjoy the experience".
Uhh, when people talk of living out of a vehicle in the context of homelessness, they're talking about people parked in the back corner of a Walmart lot with their laundry and many earthly possessions beside them, not social media creators making YouTube videos for "#vanlife".
Colleges do tend to be a bit more careful, but they often publish hiring numbers based on graduates rather than students, when advertising. This is deceptive, because they never mention their completion rates (which are often around 50%), and significantly impacts the calculus.
Do they tell students they may be saddled with debt for 30 years and that the cost of tuition is much larger than the incomes they get from their majors?
> BloomTech falsely claimed its “income share” agreements were not loans, did not create debt, did not carry a finance charge, and were “risk free.” In fact, the agreements are loans with an average finance charge of $4,000. The loans carry substantial risk, as a single missed payment triggers a default and the remainder of the $30,000 “cap” becomes due immediately. BloomTech further hid the cost and nature of the “income share” loans by not disclosing key terms like the finance charge and annual percentage rate, as required by law.
Student loans from a legitimate lender don't come with balloon payments, the APRs and any finance charges are clearly disclosed, etc., and they're not making up graduation rates.
When in reality that career is losing jobs and less than 10% of graduates get one. Anything what would have you work in a museum would probably meet this criteria.
Alternative is they told the truth, everyone went in with eyes wide open and everyone is responsible for their own student loans.
Recently a number of actions by FTC and CFPB have been taken due to false claims of job placement or success, especially when tied to financing options. If a college makes a claim like this that is patently false it’s worth sending to them.
In my experience, colleges (at least those that are not-for-profit) don’t actively try to convince you to attend their campus. The expectation or pressure to attend generally comes from their family, friends, and school community.
If a reputable college really wants a student to attend, their financial aid office will generally find a way to lower your costs. Or else they will deny your application, or at best load you up with ugly Parent PLUS loans.
My youngest brother is a high school senior who was recently admitted to an Ivy around three weeks ago. Since then, he has gotten a decent amount of physical and electronic mail on why he should attend. I think highly ranked schools have an incentive to convince admitted students to attend to keep their yield rate high, which factors into their ranking.
This is great. But I hope they do the same thing to so called "legitimate" universities who have long deceived students as to the value of the degrees they grant.
I recently met a liberal arts student from an Ivy League university who has been under-employed for twenty years. She still has unpaid student loans and she graduated in 2007! She has had to work in retail positions from time to time. And she's considering retraining via a vocational school to be an electrician because that's what her father and brothers do and they make 300K+ a year via the family business.
Things seemed fine in the beginning. The instructors were good, and I liked that there were actual live classes. Things degraded very quickly. They kept changing the format and the curriculum ("iterating"). They doubled the length of the program that I was in, which made it impossible for me to even finish it. I was working in a tech support job where we had to do shift bids and no shift was guaranteed. I enrolled in a plan that fit the shift I was working, and the expected end date, and when they changed the program length and format, I couldn't complete it.
They promised career guidance, including having a career councilor, but I never got one. They kept telling my cohort we would get our councilors after this or that milestone, but when we got there they would move the goalpost again. The closest we got was a resume course that was not relevant to tech at all and a resume review by another student.
When I had to drop out of the program, I tried to get them to cancel the ISA or reduce it, but they said I had completed "most" of the curriculum and thus was on the hook for all of the ISA.
They then started billing me for it because I was working in tech, in the job I had for 6 years before I ever even started their program.
I went to a lawyer and was told it wasn't worth suing, because they required arbitration in NYC, which would cost more than I would save.
> Allred tweeted that the school achieved a 100 percent job-placement rate in one of its cohorts, and later acknowledged in a private message that the sample size was just one student.
[0] https://news.ycombinator.com/item?id=33827202
I know dozens of students who attended and turned their lives around because of the program.
I see Lambda Alumni on every page of LinkedIn job boards.
I'm sure some people had a bad time, but all of the ISA issues GP stated are clearly stated in the contract, and these calls for "jail time" are absurd. People clearly know almost nothing about the program, or its success rate.
Don't forget that Student Loans still make this look like charity by comparison in virtually every way.
"It's better than a typical USA student loan" is a very low bar.
But that the literal alternative, so feels pretty fair to compare.
You can simply self-teach.
A bootcamp isn't a CS degree.
Not everything can be for everybody.
No, but you can expect none of them to have been lied to.
> If Allred is an unscrupulous scammer, he forgot to do the greedy part. The guy is worth less than a lot (maybe most) FAANG SWEs
The defense is he's a fraudster, but incompetent?
The CFPB report really doesn't make this obvious. All I've seen in this thread and in the CFPB statement are claims with nothing to back them up. The worst I've seen is "100% cohort", which doesn't seem to condemn the whole program.
> The defense is he's a fraudster, but incompetent?
The defense is I'm having a difficult time finding actual evidence of fraud.
No one in this thread has suggested this.
If 90% of students aren't _scammed_, but 10% are _scammed_, there is an ethical disaster. But at this point it's clear you either have some actual financial incentive/relationship with Lambda School, or you just don't want to be wrong. Either way, I don't think engaging any further will be fruitful.
This is quite a definitive claim by you. Do you happen to have the data for what FAANG SWE's are worth so we can compare?
levels.fyi
Happiness with a degree is unrelated to fraudulent advertising and sketchy/deceptive contacts.
Most universities don't lie so blatantly about services provided to students or graduate job placement percentages.
You really had to use something as cringey as this ridiculous trope?
Just go with underwater basket weaving or something less blatantly offensive to a portion of people while riding your high horse.
https://pacific.socsci.uva.nl/besnier/pub/Polynesian_Gender_...
If you don’t like it you’re not forced to offer a valid rebuttal. You have the option to disagree or not. But taking the easy way out by shutting down the conversation just makes the situation worse for everybody. Nobody was on a high horse until you went there.
But they clearly lied about much of this stuff in the headline publicity. Lying prominently and 'clarifying' the lies in the small print is obviously still fraud.
Doing fraud and saying 'but the majority of the people we defrauded still had an overall positive experience' is not a defense.
Jail time for consumer credit fraud is a perfectly normal outcome. Don't lend consumers money if you don't want to be in a regulatory environment where fraud is taken very seriously.
I'm very sure all the ISA issues are clearly stated in the contract. Everything is very clear about the fact that you will pay a minimum of $17-18k, and a max of $30k as a percentage of your monthly income. It was very clear that missing a payment would incur the entire loan being owed immediately (presumably it would go to collections).
The "hidden $4000 finance charge" I don't really understand, given that it is apparently built into the loan. It's not like you get charged an extra $4000 on top of the $30k (assuming you pay that).
I'd still choose this route over 4 years plus college tuition for a CS degree.
The CFPB statements outline where BloomTech was misleading at best. You can’t dress up a loan as some other name and skirt regulations, no matter how much small print you use.
In the rest of your comment you repeat the claim that I was responding to, that all the correct information was in the contract. You seem to have ignored the two key caveats I made: that their contracts might be compliant now, but they probably weren't before they were first investigated. And secondly that they have demonstrably lied extensively outside of the contracts themselves. Lying to convince someone to sign a contract which of itself is truthful, is definitely fraud.
Perhaps you don't understand "the hidden finance charge" because you don't understand regulation of consumer credit. When you buy a car, the dealer has to show you numbers breaking down what the cash price of the car is, and how much you will pay in interest. This stops them tricking people by eg raising the sticker price and telling you that the credit is cheaper than it is. This isn't a guideline, it's a law. And the numbers have to be presented in a way which is not obscure or misleading. Scott Tucker got 16 years for this.
https://x.com/austen/status/1780798598046990358?s=46
It’s difficult to speak out about problems with your educational institutions because your own reputation is partially attached, at least in early career. I see a couple people in my Twitter and LinkedIn feeds defending BloomTech publicly today despite having previously complained about their experience in private. It must be difficult to see your educational experience being exposed as being poor, which probably prevents a lot of people from speaking out. The Lambda/BloomTech grads I know are actually smart people, but they had to self-teach their way there. Lambda lured a lot of smart people in by proximity to Paul Graham and all of the positive press they received online when they started out.
The stories I have heard about Lambda/BloomTech seem to show almost a willful attempt to not get the basics right. I understand the financial component might have been difficult, but the education is straightforward. To fail it with millions of dollars of funding is outstanding.
There's probably something to who you're attracting as well. If your pitch is "come work hard with us and we'll help you learn", you draw people who are ready to learn. If your pitch is "come take out a [loan we won't call a loan] with us and we'll make you a bunch of money", you draw a different set of people.
That's not even saying anything against the students of Lambda school. I believe one issue has been people joining to improve their economic outlook, while working a different job to continue paying bills. You have to be pretty thoughtful about how you work with people who have a tight schedule. You can't just throw your curriculum and your expectations up in the air any time you want, and expect all those people to "pivot" with you. But the focus always seemed to be more on the "success" of Lambda school than on the actual success of every student.
From all the stories that come out of Lambda school, it really feels like the classic predatory view of students. They're not so much learners as they are potential sources of money.
Much of the crowd here isn’t very smart.
They simply happened to be at the right place at the right time, ie a time where “software was eating the world” and also the iPhone/Android took over.
Finally, the success of the actual smart people in Tech (Google, Apple, Amazon, FB) who are largely pre-iPhone companies, meant that there was a lot of venture money flowing around, when the VCs discovered the Uber model. Spend a ton of money to establish monopolies (and break a bunch of laws along the way, which you could get away with because Tech still had a good reputation thanks again to the pre-iPhone pre Web 2.0 companies) and walk away with the money while exploiting customers, clients, governments and employees.
They mistakenly think their success is due to how skilled or smart they are they think they’re hot shit and their thoughts are gold. But most of them are just like Elon Musk: average intelligence people who got lucky enough to climb to the top of the pile.
The same is true for most software people. We think we’re super smart because we have logical thinking and understand a complicated thing that most people don’t, but then you can always get a good laugh reading the HN crowd try to talk smart on other subjects like physics / quantum mechanics.
Talking out your ass about subjects you don’t understand isn’t limit to software people. It’s funny you mentioned physics because really smart physicists would frequently spew all kinds of stupidity about software when I was in grad school.
Relevant xkcd: https://xkcd.com/793/
Not all physicists. Some are pretty chill. In fact a physicist I worked with was the one who clued me in to the whole "lots of physicists think they know everything" joke/not-a-joke thing, he thought the whole situation was very funny.
Hiring people who have experience and know what they're doing isn't very revolutionary or disruptive.
Plus it can be hard to evaluate competence in a field you don't know that well yourself.
I’ve instructed at two boot camps (one in North America and one in Europe). It seems to be standard practice in the industry: inflating placement numbers, very low quality material/curriculum and course material, a kind of omertà where students fear speaking up, admitting students who clearly don’t have the skills and will drown in the course, stringing you along “it’ll get better you’ll see” until you pass the number of days where you can’t drop out without losing a significant chunk of money, counting the graduates cum instructors towards your graduate placement rate…
From my experience, boot camps are mostly scams. Maybe they will be a reckoning, it really sucks that the business model basically revolves around deception and taking thousands from people who want a career change.
We had a curriculum designed by people with a background in education, externally audited placement rates, an exceptional alumni network, instructors and mentors with industry experience. Most importantly, it was a non profit.
It seems like there is something to be said for intensive vocational education. It’s a shame that there are so many people taking advantage of students.
> They then started billing me for it because I was working in tech, in the job I had for 6 years before I ever even started their program.
This is similar to the bootcamp I saw up close. They promised placement help, making it sound as if they had a strong incentive to help students succeed, but in the end all they did was have someone comment on their resume.
Eventually the student got a low-paying job based on their previous education and the company took a big chunk of the income. The job was unrelated to the useless and poorly executed instruction, yet they still got the money, because they had a signed contract.
This is no better than the guys that make money on phishing attacks. Just a different form of scam.
The problem is that incentives are definitely not aligned. Once the student signs the ISA, they can put significant resources into helping the student get the best possible job, or they can put nothing into it and take a big share of the income the student would have otherwise earned. Incentives are only aligned if the ISA is based on the additional income from going through the program, and there's no way to measure that.
I think what we've learned is that this can only work if there's an outside regulator, such as an accreditation body, preventing bootcamps from taking the parasitic approach.
I think that's it's the pressure to grow and become a "unicorn" that seems to encourage these kinds of ugly compromises and behaviour. That kind of thing can be just annoying if the company was some kind of social media thing but when you get involved in something as important as education which can have a huge impact on a persons life, you have to be responsible about it. But that doesn't really help the valuations.
[1] https://news.ycombinator.com/context?id=20965780
That's damning. While I get that ISAs are controversial, I didn't expect this kind of nonsense - I wonder how common it was that enrollees were charged for "landing" their old job?
In any case, sorry this happened to you, hopefully this recent ruling will give you some recourse.
Serious question: why not? What out of SV and VC in the past 20 years has shown they have any intention of doing anything the expensive but "good/right" way rather than cut any corner, oversell, overpromise, underdeliver, and literally commit crime to get their paycheck?
Could you do me a favour and look if they had conflicts? (Also, who was the arbitrator, AAA or JAMS? Because it shouldn't be more than $5k, and that's an extreme. Also, in most arbitration agreements, the company drafting the agreement pays the filing fees, which could knock off $100 to $3,500.)
You can’t, but the cost of enforcement can vary. In this case, it sounds like there was a bad counsel-case fit. (OP needed cheaper or better counsel.)
Previous trouble they've been in:
https://dfpi.ca.gov/2021/04/26/lambda-school-reaches-settlem...
https://techcrunch.com/2021/05/13/lambda-school-lawsuits/
This is a silly idea lobbyists love because it sidesteps the actual corporate-destruction mechanism: liquidation to pay massive fines, license revocation and/or personal liability for senior management.
Consider even the penalties here, which effectively ban Allred and Lambda from doing business. If you corporate death’d them, the contracts and assets would still exist. Allred would be unpunished. Everything would go back to shareholders who were presumably fine with the status quo, and would be fine putting them into a new entity that Allred could manage. Okay, so you cancel the contracts. Now the janitor who hasn’t been paid in two months is screwed. Okay, so you exempt employees. Allred’s an employee! Exempt him? What do you even pay the janitor with? Okay, exempt some assets. How many? How do you choose who must keep paying versus who is let off? Maybe pro rata? Who will administer all this? Et cetera, et cetera.
Contrast that to a massive fine. Company goes Chapter 7 and into a deep body of law that has experience dealing with the above. (Ideally paired with a license revocation from any lending for Allred and the entity, in case they try to Chapter 11.) Shareholders are wiped and free to pursue Allred. Allred and Lambda are neutralised.
The difference between this and a big fine:
* Lots of big fines aren't big enough to actually kill companies that deserve it,
* Fines tend to go to the government, while companies that deserve a "death penalty" often have victims who could use that money,
* Bankruptcy doesn't prevent people from starting another company, or board members who failed at oversight to join another board.
Just do damages.
> Lots of big fines aren't big enough to actually kill companies that deserve it
Neither is a corporate death penalty. You’re just shuffling around assets and making work for lawyers.
> companies that deserve a "death penalty" often have victims who could use that money
Why the extra steps?
The closest we have to a death penalty is license revocation, e.g. Arthur Anderson [1]. Victims got screwed. Taking it further and the death penalty analogy seems appropriate--death penalties aren't about restitution. They’re an instrument of retribution.
> Bankruptcy doesn't prevent people from starting another company, or board members who failed at oversight to join another board
Neither does a corporate death penalty. That’s what bans are for.
Corporate death penalty is a gift to corporate America. It sets activists running in circles over a stupid idea that represents simpler, precedents punishments with the ambiguous baggage of extra steps.
[1] https://en.wikipedia.org/wiki/Arthur_Andersen_LLP_v._United_...
This is wrong for a variety of reasons:
(1) The corporate death penalty is proposed as an additional remedy, not an alternative remedy, to personal liability for officers, etc. (in fact, many corporate death penalty proposals would make additional personal penalties for corporate officers available as a part of that on top of any that would be available independently of the corporate death penalty for their actions, e.g., in one proposal for a federal charter revocation law, “The statute should specify that, for a period of five to ten years, the directors of the condemned corporation could serve on the same corporate board together only when they are a minority, ensuring that that set of directors would not form a majority of the board of another corporation. Similarly, key senior officers should be prohibited from working together for five to ten years. In addition, no director or officer could serve on the board or work for any corporation affiliated with the parent corporation of the convicted corporation. Courts must be empowered to issue injunctions to enforce these rules, preventing reconstitution of substantially the same corporation under another name.” [0])
(2) Corporate death penalty proposals tend to include proposals for how dissolved corporations are to be wound down that address the concerns you address (like a bankruptcy, these would be generally be administered by courts, probably most normally the court issuing the penalty.) From the same proposal, “The dissolution of the corporation should impose the harshest penalty on the corporate entity itself, directors, and officers, while only damaging shareholders-who have less control over corporate misconduct-to the extent necessary to incentivize them to take an interest in the corporation’s criminal misconduct. […] the penalty should dissolve the corporation with as little impact on innocent parties–employees, consumers, suppliers, and the larger economy-as possible.” [1] The proposal goes on to propose that an corporation subject to the corporate death penalty should have a court appointed “czar” take over management of its assets (similar, in a way, to a bankruptcy trustee), operating them and preparing and organizing them for sale (by default, by auction, but by other means where appropriate), with a specified distribution of the proceeds: “The statute should specify that revenues from the sale of the corporation’s assets first pay court costs and the costs of the czar’s operation during dissolution. Next, nonmanagement employees of the corporation that have clearly suffered harm due to the dissolution, such as being rendered unemployed, should be compensated through a one-time stipend. Finally, the balance should be distributed among the shareholders. In this way, the affairs of the corporation could be wrapped up in an orderly and just way that would protect innocent parties while only causing minimal harm to shareholders.” [2]
(3) As with personal sanctions, the corporate death penalty is proposed in addition to, not in replacement for, criminal fines and restitution, and civil damages that may be available. The key difference between corporate death penalty and bankruptcy is that the corporate death penalty can punish directors and officers, and it de-institutionalizes the firm in much the same way as bankruptcy, but it does so even if the amount of the monetary penalties would not render the corporation insolvent.
[0] https://www.gwlr.org/wp-content/uploads/2018/04/80-Geo.-Wash..., pp. 621-622
[1] id., pp. 628-629
[2] id., p. 630
"The Bureau’s order permanently bans BloomTech from all consumer-lending activities and bans Allred from any student-lending activities for ten years" [1].
[1] https://www.consumerfinance.gov/enforcement/actions/bloomtec...
Corporal death penalties aren't an additional remedy--they're the ultimate remedy. The branding sucks.
> to personal liability for officers
Just do this. Why the extra steps?
> Corporate death penalty proposals tend to include proposals for how dissolved corporations are to be wound down that address the concerns you address
So does bankruptcy, a precedented mechanism.
> the penalty should dissolve the corporation with as little impact on innocent parties–employees, consumers, suppliers, and the larger economy-as possible
How? You're putting their employer, vendor, customer and taxpayer out of business. (If not, what are we talking about?)
> but it does so even if the amount of the monetary penalties would not render the corporation insolvent
Increase the fine.
More pointedly: if you can't justify a fine or penalty more than the company is worth, maybe--on the net--they shouldn't be poofed?
Criminal companies should take every opportunity to shift debate around fines, penalties, license revocation and personal responsibility to one about a corproate death penalties. You get the baggage of the corporal death penalty for free with a heaping spoonful of ambiguity. While everyone debates what common punishments this Rude Goldberg replaces, you can slink away. Worst case: if they do enact it, it's so novel and convoluted you can probably buy a decade of appeals before you have to give up the assets.
Fines are money. Charters paperwork. We're currently seeing a charter revocation example in the Trump fraud trials [1]. It is by far the least meaningful part of the penalty. Could Trump trade the fine for the revocation, he would take it--anyone would.
[1] https://www.businessinsider.com/trump-fraud-ruling-corporate...
If you to set the precedent of consolidating the consequences and doling them out to the relevant executive officer you’ll end up with c-suite executives around the country throwing their personal and corporate influence into getting that precedent neutralized.
Yeah, rich CEOs and investors are opposed to taking any responsibility for their actions, but that doesn't we shouldn't try to hold them responsible.
A CEO will green light high level strategic direction, but the crimes described here could easily emerge from the implementation of that directive at lower levels of the company. “Plausible deniability”
The buck stops at the top.
As far as my cursory glance at wikipedia has informed me, the act itself works around the “plausible deniability” by requiring certain disclosures containing factual information be signed off by key executive staff rendering it impossible for them to say “I didn’t know!” with regards to specific material information.
The blanket concept of holding executive staff accountable for the wrongdoings of the company would mean a lot more disclosures, forms, sign offs, etc. for “any” eventuality that would render the position pointless as they wouldn’t have any time to actually do anything useful.
Because at the end of the day how do you prove that joe schmoe CEO actually fostered a culture that resulted in criminal acts? This isn’t even mentioning the individuals who were actually involved and directly culpable.
Shockingly it worked. Some companies that would have never worked with "oldCompanyName" were happy clients of "newCompanyName".
What's the problem you see here?
The sub continued to deny a connection to the school, but I still don’t believe it.
> Lambda School will go on growing and transform education. Few will remember having been part of the jeering mob.
https://twitter.com/search?q=from%3Apaulg%20lambda&src=typed...
https://x.com/paulg/status/1110677737558159360
> There are of course some people who are genuine frauds. How can you distinguish between x calling y a fraud because x is a hater, and because y is a fraud? Look at neutral opinion. Actual frauds are usually pretty conspicuous. Thoughtful people are rarely taken in by them. So if there are some thoughtful people who like y, you can usually assume y is not a fraud.
I guess all those folks calling these guys "frauds" weren't "thoughtful" enough.
As someone who was a low-ranking insider at Lambda some years back, it was my perception that the people calling Lambda out presented a mixed bag in terms of veracity.
Someone here commenting on this story said that Lambda counted their student TAs in their employment stats, for example, but to the best of my knowledge this never happened. There were a handful (like three or four that I know of) that we did hire as full-time staff doing real jobs, and I'm pretty sure we counted them as employed, but not the student TAs.
With respect to this ruling, it says that students were subjected to up to $4,000 finance charges. I hadn't heard of that at all. Reading the details, it turns out that's the difference between the published upfront cost of paying Lambda versus using an ISA. The upfront cost wasn't hidden; it was published right next to the ISA cost. But because they weren't the same value, and it was probably more expensive to use the ISA, they called the difference a finance charge. Which is fine, but if Lambda had simply not allowed people to pay upfront, there wouldn't have been a "finance charge" to complain about. In other words the finance charge was already published in the rules for how the ISA would be repaid. So, factually accurate, but a strange thing to complain about, like complaining that the upfront cost of a house is lower than the mortgage cost.
Still others complain about the selling of the ISAs to investors, and say that that means that Lambda would still make money no matter how well their students performed. However, this would be a very short-sighted strategy as no investors would buy the ISAs if the students weren't performing. So selling them didn't really remove any of Lambda's impetus to place students in jobs. (It did improve the cash flow situation, however, which is why it happened.) From what I saw, the goal of placing students was ever-present regardless of whether or not Lambda was currently selling ISAs.
My point is, there's a lot of information out there by a lot of people who aren't sure about what they're talking about. And it can be tough to know what's real and what's not.
One thing I can say with certainty is that all the instructors who worked there back in the day were absolutely fucking passionate about getting students into jobs and changing the world, in that naive startup way. Some of the success stories from those early cohorts are the things I'm most proud of in my entire tech and teaching career.
As part of my layoff agreement, I had to sign a non-disparagement clause to get my severance.
100%
The fundamental concept had merit, but the business had a very very low probability of succeeding financially. Once the financials flipped, the original mission went out the window.
I’m proud of the work I did there and I know we gave many students great opportunities. It was sad, but not surprising to see it go so wrong. But for a time, for many students, good things happened.
That's true. A source of confusion is that the school did hire at least one bootcamp graduate as an instructor, though he graduated from a different bootcamp. And it's worth pointing out that the marketing material promised world class instruction, and a fresh bootcamp grad with zero industry experience is the very opposite of that. For that matter, the head of the data science program was the CEO's brother, whose only industry experience was from a no-name company in Utah.
> With respect to this ruling...
It's a waste of time to argue the semantics of income share agreements at this point. They always operated in a gray area, which is why Lambda School hired lobbiests to try to make them officially legal. That effort failed, and the law has decided they're just another form of loans with convoluted hoops to jump through.
I imagine that they got that $4,000 number from all the people who attended the program, received zero practical skills to get jobs, went on to further training (another bootcamp or even an associates degree) and still had to pay back the company because the terms of the ISAs lasted anywhere from five to eight years.
> Still others complain about the selling of the ISAs to investors, and say that that means that Lambda would still make money no matter how well their students performed. However, this would be a very short-sighted strategy as no investors would buy the ISAs if the students weren't performing.
Given the ISAs disappeared from the marketplaces that resold them to hedge funds, that sounds like exactly what happened. The issue is that it fooled prospective students into thinking, "Hey, if this company is able to run off ISAs, the program must work!" In fact the company made money by leaving hedge funds as bag holders.
> My point is, there's a lot of information out there by a lot of people who aren't sure about what they're talking about. And it can be tough to know what's real and what's not.
The same is probably true of Bernie Madoff, Charles Ponzi, and Sam Bankman-Fried. When someone acts like a sociopath for long enough, people start to assume that everything they do is unethical. There is a long list of crimes that the company committed which have been verified from multiple sources. A few people on the internet getting the details wrong doesn't invalidate that.
> As part of my layoff agreement, I had to sign a non-disparagement clause to get my severance.
They did the same thing to students who scrounge together the money to hire a lawyer to get out of their ISAs. These students had to any reference to Lambda School from their LinkedIn profile and tell nobody about what happened. While you did it to make money, imagine how it would feel sign away your right to free speech for fear of a $30,000 debt.
But to be clear, that's not where they said they got the $4000 number. It would be one of those things that'd be nice to correctly know. Do ISAs come with a hidden $4000 fee? The answer: no. Did they have to pay $4000 more because of additional training? No. Did the ISAs last 8 years? No. (At least not for any of the years I was there.)
> Given the ISAs disappeared from the marketplaces that resold them to hedge funds, that sounds like exactly what happened.
I have no knowledge of their final disposition, whether or not the purchasers realized gains on the ISAs.
I know other companies like App Academy and Launch School have had successes with ISAs. For me, this is the real pisser of all this. I think done right it's a workable, useful model, but it got dragged through the mud here, and now we're left with the same old bullshit loans that are fucking the country over. I don't care about Lambda, but I really wish ISAs had been worked on to greater effect globally and hadn't gotten this tarnished image.
> A few people on the internet getting the details wrong doesn't invalidate that.
Of course not. But it also doesn't make the wrong details right, or something you should believe, which is what this subthread is all about.
How can we be expected to make any learned decisions about these sorts of financing instruments if we're throwing bad information in with the good?
I think you're dead on with that first link. I've heard of some schools that did not apply an effective filter up front, despite instructor pleas, and suffered for it greatly with lowered job placement, ultimately failing with the ISA model.
I feel there's a class of students for whom ISAs are perfect, and, just like you said, a class of students for whom they are ineffective. The ones where the ISA works and standard school is out of reach have incredible success stories.
I found something similar when I taught a nearly free C++ class. I put a really simple test on the front with a refundable $20 fee (if you took the course). Everyone who ultimately took the class was really motivated. $20 was all it took to filter. $5 might have even worked since I speculate the effect is psychological, not economical.
The second link is good food for thought, some stuff I hadn't considered. If the ISAs are sold cheaply enough, you really don't need much student success to get a return.
IIRC, in Lambda's case, the ISA sales were stopped while the company was still young (having gotten another round) [caveat: I didn't have much visibility into this side of things], and anecdotally I think they had some of their biggest successes early on, but I agree with your points on this.
One thing that really impressed me about Lambda was how diverse in every respect the student body was, people from just every walk of life. Waaay more so than I'd seen at any university. I credit the ISA for making this possible.
One of my missions in life is to enable people to get the training they want to get. ISAs were wonderful in that regard.
Education has a couple of unique attributes that makes it difficult to assess:
This is in contrast to, say, a restaurant where diners can immediately determine if they like the food and can compare it with competitors (because they dine at all the restaurants).Those two attributes make it very easy to lead with hype and marketing and vulnerable people are particularly susceptible to it. imo it's not appropriate to deploy the standard startup playbook in edu, especially if you find yourself attracting vulnerable students.
Ok, now combine that with ISAs, which has some positive qualities but are not as incentive aligning as marketed. And then if you sell the ISA in bundles, then it becomes even less incentive aligning. Well, I guess it's now aligning with investors and loan brokers. But it's certainly not aligning more with student outcomes.
It all makes for a very delicate situation where you have vulnerable students biting on the ISA bait.
I know it seems like I'm just complaining but I've been thinking about these problems for a long time and I come with solutions. Or, particularly, a solution: imo the best thing an edu institution can do is allow students to leave easily.
Why do we never think of restaurants as predatory? The idea is ludicrous to even consider. There are of course terrible restaurants but we can just not dine there again and eat elsewhere. There are lots of restaurants around.
And here's the issue: there are also lots of edu institutions around but every single one of them deploy the marketing->entrapment playbook.[3]
How does marketing work when you have a bad school? Because of the time-lapse between value received and service rendered. The ISA is easily abused in this environment because it's both the marketing and the trap.
Anyway, I'm just riffing here... btw, huge fan of your books and work! Despite what I wrote above, I knew Lambda was making an honest attempt at their curriculum when they hired you.
I've often thought that anyone can be a dev--if they want it. Meaning, it has to be someone who likes the material enough to put in the effort. It doesn't matter if you're smart enough; it only matters if you're going to put in the time. There's a reason I'm not a CPA. I'm absolutely smart enough, but eff that!
And lots of times schools do advertise "we guarantee you a position in a high paying job if you just put your ass in that seat for 6 months". Who wouldn't want that? But they leave off the "you gotta want it" part. And then people get trapped.
Related to "easy to leave", we fought to filter the front-end heavily for people who "wanted it". And we fought to allow students to attend for as long as possible with no obligation. The goal was to allow them to discover if they wanted it. However, this was not realized while I was there. So much more I could say here about how that didn't happen, but I'd wager you have a pretty good guess.
Hand-in-hand with wanting it (IMHO) is having a comprehensive, heavy-hitting curriculum. The guy who hired me left Lambda ages ago, but he and I came up with a list of things people should learn to be decent devs... and that was one helluva list. Needless to say, not all of it got covered, and as time went on, less and less of it did.
I love that California community colleges are now free. Easy to leave!
I really appreciate the conversation, btw. I also like geeking out about this topic, and it sounds like I could learn a lot from the ground you've already covered. I'll check out the reading after I finish prepping for class next week. (0-1 Knapsack and dynamic programming. Phew.)
Agree that ISAs can be useful. But it's a tool that can be used to harm or help. Elevating it beyond a financial tool to some sort of educational breakthrough was a disservice, imo.
We agree on the value of community colleges. I wish they were better funded and more people worked to drive CC graduates to six-figure jobs.
[1]: https://paulgraham.com/newideas.html
https://www.paulgraham.com/jessica.html
He also seems to give some credit to Jessica for choosing to back the Reddit founders:
Edit: she gets mentioned here too: https://www.paulgraham.com/ycstart.htmlPG, for example, didn’t realize that discriminating against people who have children might not be great until he himself had kids.
He’s a mid dude with gross feet who came up with a wildly profitable business model (6% equity in as many promising founders as possible).
Does he sell feet pics :) ?
Such great company he keeps.
PG stepped away from YC 10 years ago to raise his kids in the English countryside. I don't see what seems to indicate he has a great thumb on the pulse of Silicon Valley startups in 2024.
Mighty always sounded like a bad idea. But when I saw PG really making a big deal about it I followed Suhail on twitter because I just had to see what PG was going on about. From what was posted online it sounded like the company was super successful and growing, and I still didn't get it. And then it went under, without any fanfare. Just poof.
But that was Suhail, totally sure in his lie, smart enough to change the future, but dumb enough to not see his business sucked.
I don’t think it’s right to be hard on PG or Suhail. People fail and Suhail was very smart, smart enough to hold a fracturing vision together much longer than anyone thought. He looked like a guy trying really hard and probably was.
As a society we should work tirelessly to hold them accountable and break up their concentrated power when it develops.
That was one of the dumbest fucking startup ideas most people had seen in awhile. Many just sort of said the obvious out loud, which is that it made no fucking sense as a business, and then all these rich supposed geniuses tried to shout them down.
Even by the usual standards of the genre that one was a head scratcher.
What do you see being disappointing about tweets on Israel? I've mostly seen him care about Palestine civilian deaths but I can't say I've read and remember 100% of his tweets.
the correct question is who funded coinbase
It seems kind of important to the premise. These things may have been loans and had a finance charge or whatever. But if you can “default” and nothing happens… what are they really?
Later, they extended it to eight years and removed the “tech job” stipulation. I read one account a guy owing money who worked as a mailman.
The important part of this is a loan gives you rights as a creditor that an ordinary Accounts Payable does not. Did Lambda School’s creditors ever exercise those rights? If not, how important is the existence of a finance charge or APR or whatever? I mean, if it is only a loan for the purpose of being a product for banks, but functionally is just a, whatever, a payment plan: man, the CFPB is basically complaining about annual billing versus monthly billing discounts, bundling, and any number of psychological tricks. Scummy yes, but dramatic? No.
In this case, defendants are accused of conning "at least 11,000 income share loans" "carrying an average finance charge of around $4,000", but their fine is $164,000? A fraud of $44M just for the financing charges produces a fine of $164K? As I missing something?
There are almost never company-killing fines. There are almost never consent decrees with stipulations that change the company's behavior. There are almost never instances of piercing the corporate veil and going after executives or shareholders. It's a total joke.
Whereas, settling meets the company's incentives (eliminating uncertainty), meets the regulator's incentives (bad behavior is stopped locally). The moral hazard created by making fraud seem less risky (because the punishments aren't that bad) is born by the public.
The solution here would be to limit the possible legal shenanigans that companies can use to increase the cost of taking a case to trial.
In this case, the 'stick' is that CFPB is preventing the company from issuing new loans, de facto forcing them to cease operation. (Or I guess charge regular tuition, like a normal school?) That's a pretty big deal.
And to make matters even more depressing the CEO just tweeted [1] that it's no biggie for him:
> BloomTech continues to focus on its core mission: improving the lives of students and enabling them to fulfill their economic potential. While it’s been frustrating, we’re glad to put this behind us.
[0] https://www.theverge.com/2024/4/17/24133577/lambda-school-bl...
[1] https://twitter.com/Austen/status/1780770303406403701
Fines aren’t intended to replace damages. If they are criminal fines, criminal restitution is also available through the same process. Even where criminal restitution isn’t available or, for whatever reason, pursued, or where the fines are civil, civil damages for those harmed are not precluded by the fines, they are on top of the fines. Fines are punishment, not compensation.
I was involved deeply in tech career volunteering several years back when this was called Lambda school.
Writing was on the wall about Lambda even then based on student feedback from a 100+ student multi year sample size in the orgs I helped.
Consistently students raised: ISAs coming to much larger payments than advertised. Constantly changing curriculum. The classic one for bootcamps - blind leading the blind with former students teaching the always changing curriculum, and juicing graduation employment stats. If I recall I even broke out the ol’ discounted cash flow math with students to actually sort out what the rate lambda was getting on these ISAs, and ya it was payday loans basically.
But, we saw justification after illogical justification about this setup. Former students employed by lambda getting aggressive. otherwise pretty well-meaning groups who had vendorized tech career support partnering with Lambda, despite seeing the same feedback as I did bc the company leads were in the same groups as I was.
Takeaways from all this if you or people you care about are trying to use these conduits to build a tech career and are evaluating options like Lambda vs a degree and so on:
- market can stay illogical, and same with its supporters, longer than when good, clear as day data about fraudulent (or more politely “very obscure and novel pedagogy approaches”) practices surfaces to counteract that narrative.
- people and orgs who have staked their future on that illogical/fraudulent market will roast their reputations in face of that evidence for much longer than you think or respect
- the feedback that matters should be the primary sources: the students that since 2019 or so started pointing out all these practices in bulk.
It is now 5 years later and who knows how many students who shredded their career goals by depending on schools like this.
We decided to settle the matter because it was clear that ongoing litigation would be extremely time consuming, incredibly expensive, and distract us from our core mission.
We do so without agreeing to or denying any of the allegations in the consent order.
https://twitter.com/Austen/status/1780770303406403701
Weird to read further down the thread, where he acknowledges the wording of the press release is legal bullshit, and then employs an entirely different set of weasel words. I can't even sum this up.
As is the intent with most serial liars, no? Twist you up so bad that it quite literally jams up your reasoning ability, making you more susceptible to the con.
[1]: https://www.recurse.com/
Lambda School is more of an attempt to train the average guy who wants to increase his earning ability. He doesn't have the time or patience to "work on cool things" in the hope of "learning a lot" which is loosely correlated to finding a good job.
They cater to different crowds and solve somewhat different problems.
I highly, highly recommend it to anyone considering going there. Some of the kindest and smartest people you'll meet.
On the surface it doesn't seem like a bad model, but of course it could be twisted to evil ends. From the article:
> The loans carry substantial risk, as a single missed payment triggers a default and the remainder of the $30,000 “cap” becomes due immediately.
> Students were therefore deprived of rights they should have had when their “income share” loan was sold to an investor [without the required Holder Rule provisions transferring legal responsibilities to the new owners].
If you look good on paper before the school then you don't need it and won't be motivated to share your income. So the applicant pool reduces itself to those who on-paper don't have great chances. So you need to cause a really big delta in the ability of those people to make good money in the industry for you to be able to get your cut.
And you're gonna pull that off in 6 to 9 months? I'm a big believer in a lot more people having potential to learn than currently have easy opportunities, but that's a hell of a timeline.
I think the problem they’ve run into is that there are only so many of those types to go around, and you have to stay small or really tackle the problem of transforming someone in 12 weeks eventually. That’s a different and much harder ask.
Eventually the majority of those folks who were going to make the switch... Did. Then the average bootcamp graduate became someone who bought into the hype that anyone could learn to code. A lot of truck drivers, CS reps, and teachers applied. There nothing stopping those people from becoming great engineers. But they are going to have a more difficult time on average than the person who dabbled in coding for ten years while working as an engineer in another field and just needs a crash course to be proficient in web development.
Placement rates dropped significantly around that time.
They literally ensured their success by filtering for people who would already succeed no matter what. I don't have any misgivings about it because the curriculum did help me focus on some gaps in my understanding and build up a profile/portfolio that could land jobs.
It's still expensive and had that curriculum been open at the time I could have done the whole thing on my own and saved some money.
The social aspects of the program didn't end up really benefiting my career at all. The vast majority of my cohort had STEM degrees from prestigious places or were people who were programming since an early age like me. I had already had a long career in IT before I attended. 100% did get jobs, but 2 of the guys in our cohort struggled for a while -- though I think that was to get out of paying the ISA.
But you're right, $30k (in the worst case) is a lot of money to pay for less than a year of bootcamp.
That includes room and board in an expensive dorm (it was part of the honors program I was in) and a meal plan with the school.
Large companies especially conglomerates do this by hiring freshers and investing in their learning and benefit by paying a bit lesser than the market over the years .
Apprenticeship has also been successful economically at even a scale of one master/sole proprietor for centuries.
The key is to derive value while they learn, not split the learning and earning parts completely
In that world, the school only has to get the students to do a "hello world" in python and apply for the right jobs. Such a school is very cheap to run, and very lucrative as long as a decent proportion of students fit into the desirable categories.
The students themselves usually aren't aware how desirable their application is - and therefore believe the school is their route in rather than a few youtube tutorials and a direct application.
Is there any wonder that Google and other (not exclusive to tech) companies desire this?
[1] https://www.mckinsey.com/featured-insights/diversity-and-inc...
Write a convincing report saying "Companies with a Z in the name do better", and you'd see the same result.
(I have worked with 2 such recruitment teams).
investing in startups is kindof like betting on the future potential of founders, though it's tied to a business idea.
Upstart started as a personal loan for students and expanded to other financial services, it went public recently. They innovated by doing the regular thing (student loans) better than the competition, rather than trying to be both the lender and the school https://en.wikipedia.org/wiki/Upstart_Holdings
> but of course it could be twisted to evil ends.
My speculation is that this was a 'road to {} paved with good intentions.' Just like most startup products face challenges in the real world, it sounds like the Lambda School tried everything they could to get high job placement rates, but weren't able to deliver at scale.
Then, as their early placement % dropped, they just didn't change the numbers in their marketing materials. After a certain point their early hopes and reality diverged enough to constitute fraud in the eyes of the CFPB
Anecdotally, we get a lot of applications for any software job posting, and I discard most of the resumes of recent bootcamp graduates. It's nothing against bootcamps, it's just a signal that the person is a junior engineer. And in the cases we have hired people with less work experience for junior roles, we've had a much higher signal-to-noise ratio in our interview process talking to people who completed traditional education (even if it was not directly a CS program) and have enough of those applicants as-is.
The fact that those are an option for accredited schools means I think it would be hard to make it work in a program like this. Especially if there is any sort of venture interest expecting actual returns. Actually educating people well is not cheap and I have not seen any of these programs that actually do anything innovative either.
Ah, I didn't realize that was a thing. That makes sense, thank you!
As I recall, some critiques were that it was only deemed viable for a small range of STEM majors, and narrows the mission of the institution toward building earning power vs. providing a well-rounded education, being an intellectual/research hub for the community, etc.
[0] https://www.insidehighered.com/news/2022/06/23/purdue-pauses...
They're often referred to as "public schools", and ISAs are often called "taxes".
Many bootcamps require full-time attendance, and many universities have part-time options. Further, community colleges are an option if the only goal is skill acquisition. Those programs take less time and are cheaper.
0 - John Oliver is not the primary driver of my thinking, but he did an interesting and engaging segment if you're interested: https://www.youtube.com/watch?v=zN2_0WC7UfU
That dream hasn't been realized, and certainly wasn't by Lambda, but I still hold out hope.
This isn’t formalized into a loan, though. Which is better for the student.
https://www.lni.wa.gov/licensing-permits/apprenticeship/beco...
Austen Allred quote-tweeted me to his gazillion followers and caused a big pile-on about how awful and wrong and anti-progress I was.
Couldn't happen to a nicer guy.
Before BloomTech, Austen was a develop for a payday loans company. His cofounder, Ben Nelson, worked as a software instructor, and left BloomTech in 2021. So maybe it's less surprising that the innovation here was in the financing, not the teaching.
A master of deception with statistics!
Honestly wonder what the true placement rate was. There seem to be some success stories I’m seeing on Twitter but this could have all been avoided had they just been up front.
That $164,000 victim fund sounds pitiful but I do wonder how it is calculated.
> BloomTech advertised on its website that 71 to 86 percent of students were placed in jobs within six months of graduation, when its non-public reporting to investors consistently showed placement rates closer to 50 percent. Allred tweeted that the school achieved a 100 percent job-placement rate in one of its cohorts, and later acknowledged in a private message that the sample size was just one student.
After a slew of negative reviews came from a few people that verifiably took the early courses, lambda decided not to improve their course, but instead to do two things:
1) they gave students financial credit for posting positive reviews on social media
2) they paid review shops out of India and China to bombard the internet with fake positive experiences.
This school are scumbags. Frankly I am shocked that it still exists and people still go there.
It's shameful YC was still shilling Lambda one year ago[2] even though there's been a mountain of evidence about its deceptive practices for many years.
1. https://www.42network.org
2. https://www.ycombinator.com/library/5N-on-starting-and-scali...
If the outcomes are good for the students, there won't be an issue with making them be straightforward about it.
A big thing that rule breaking and deceptive marketing due is cover up that the student outcomes are not good.
Making people whole is what civil lawsuits are for. Which, if I understand correctly, will be much easier with this order and findings in place. That will be some serious financial punishment on top of the ban.
Also I knew of him and his early employees from his involvement in a bootcamp called DevMountain in Provo. Interesting concepts were applied there and their practices were very distasteful in my opinion such as having a previous cohort student teaching the upcoming cohort and inflating LinkedIn recommendations with the current classmates to land jobs.
Like it isn’t wrong to do, but it isn’t right either. Following Lambda over the years showed all of these patterns to larger extents.
I’m surprised they survived their first brush with the law. Can they possibly survive this? Looks like the persona is still active and in denial.
From the announcement: "BloomTech and Allred lured prospective enrollees with inflated promises of job-placement rates as high as 86 percent, when the company’s internal metrics showed placement rates closer to 50 percent and in some cases as low as 30 percent."
Bravo Vincent!
[1] https://twitter.com/fulligin/status/1230152732809392133
[2] https://nymag.com/intelligencer/2020/02/lambda-schools-job-p...
"permanently bans BloomTech from all consumer-lending activities and bans Allred from any student-lending activities for ten years"
"ordering BloomTech and Allred to cease collecting payments on income share loans for graduates who did not have a qualifying job, eliminate finance changes for certain agreements, and allow students the option to withdraw without penalty"
This order seems like a death sentence. If ISAs are defined as consumer-lending, which the CFPB clearly says they are, BloomTech cannot recruit new customers. And they cannot collect on 50% of their outstanding loans (if the quoted internal placement rate is true).
Corporations aren’t people. Ordering a scammer to knock it off isn’t even close to being a serious penalty. Allred should be in prison.
The CFPB, like every federal regulatory agency, has only direct civil enforcement powers.
They refer criminal matters to the Department of Justice, which usually takes significantly longer before handing down charges, and does not usually disclose the existence of an open investigation until and unless it issues an indictment.
Absurd.
I kept looking at the numbers, and couldn't find a way to make this be ... profitable. The time it would take for competent professionals to spend adequate time with folks wasn't something most people could really afford. So... either get them to take out loans, or do an ISA. Neither of those seemed to make sense for the types of students who might most need this, and... it just left a bad taste in my mouth. I enjoyed the teaching part, but couldn't find a way to make it a good business.
Then years later I started seeing all these bootcamps charging thousands and thousands for what seemed to be garbage (mostly). Left another bad taste in my mouth.
Colleges have worked in the past because the outcomes were more or less guaranteed (i.e. if you got good grades and graduated, you would very likely land a job), but even that is no longer valid (outside of regulated domains like medicine, law, etc.).
I predict we will see many, many more pay-to-learn companies, institutions fall in the coming years. ("fall" could also mean become irrelevant, and catering only to those that don't understand how the world has changed and still incorrectly think that such programs will prepare them well).
BloomTech, in order to survive, had no choice but to try and play the games they did, and mislead. It's a byproduct of not having a business that is viable.
Your local community college could have the best program ever, but they won't beat Ivy League grads, purely because of the inputs.
Not just the education, but the selection process too.
If the higher-quality inputs are abundant, then the overly-exclusive selection process is somewhat deleveraging of overall potential.
If the higher-quality inputs are scarce, they are outnumbered by others having average-to-below-average potential, who often seek the exclusive membership more so than any actual high-quality performance.
Once again a large percentage of the highest-quality inputs can be systematically excluded in a disadvantageous way.
With good fortune at least a good number of high-quality inputs do gain entrance and it can set a good example, sometimes realistic, sometimes not.
Either way the higher-quality inputs are best identified beforehand, not the result of an overly exclusive selection process.
But it's this type selection process that contributes so much to some institutions' perceptions of quality, when they could be doing so much more.
From the least-prestigious programs all the way up to the most-prestigious, it seems like there is always going to be some temptation to blur the distinction among peers and tiers in a way that's confusing to students, and it's just a matter of integrity whether that is taken a bit too far.
Honestly, there’s nothing really that screams dishonesty than this tweet. Saying that your outcomes are stronger than ever when every tech company was laying off and headcount was frozen just doesn’t pass the smell test.
I was puzzled for bit, but I think you may have accidentally a word.
Reasons to eliminate a student from your outcomes report: 1. Didnt finish the program 2. Didnt complete "career commitments" aka xx number of applications per week, x number of meetings with career counselors per week, responding to all emails from bootcamp within x days - for 6 months to 1+ year 3. Didnt pay tuition or missed a tuition payment 4. Had too many absences during the bootcamp 5. Received a job offer but turned it down 6. Accepted a job offer that wasnt tech related 7. Graduate just doesnt respond to outreach from bootcamp
The 30%-50% actual placement rate is pretty realistic. I later went through the same bootcamp I worked for and my graduating cohort was probably 30% to 40%.
I had thought that debt is when you have to pay back at least the "principal" no matter what, and equity is when the financier shares the risk of you failing. Maybe that's not correct, though?
Does the definition of a "loan" include any sort of financing, even if the amount that needs to be "paid back" to the "lender" can be arbitrarily small or large? That would make equity financing a special case of debt.
When push comes to shove, the substance of a thing matters much more than the attempt to relabel the thing.
I was thinking the same thing. "Can you have a loan without principal?"
But reading through the documentation on this case, it seems like the legal answer is that you can.
YCombinator >.>
So many people like to do fake work instead of real work, including people who scoff at fake work.
I attended a bootcamp myself (hack reactor). My experience overall was very good and I owe my (6 figure) income and current career to it - the students and instructors were both impressive. I was in a dead end career and now I have a new world opportunity opened up to me.
But that being said...
I think a couple of things killed the bootcamp model:
- Saturation. Insatiable student demand + no acceptance criteria (anyone can get in) means there is robust market for bootcamps. Hack Reactor (and a few others, like Fullstack Academy and App Academy) mitigated this somewhat bc you needed to pass a (difficult) interview to get accepted.
- Fraud. Bc there is no "accreditation" so anyone could star a bootcamp, including scumbags.
So I have mixed feelings.
Hopefully, the (terrible) job market will flush out some of the shit down the toilette, but I hate that innocents, people just trying to improve themselves, got caught up in the blast radius.
Bout damn time.
The problem is that Lambda School still tries to service those debts. The victims are usually low-income, so they lack the resources to lawyer up. If they do lawyer up, they end up being forced into arbitration due to an arbitration clause in their student agreements.
So in the end, it does feel like the BPPE is a half-measure that doesn't fully tackle predatory companies.
You’re literally describing why arbitration works. Someone low income can just file for arbitration with minimal work by a lawyer. Contrast that with the tens of thousands they’d need to pay a litigator.
> I went to a lawyer and was told it wasn't worth suing, because they required arbitration in NYC, which would cost more than I would save.
It sounds like arbitration does not work, according to people who had their lawyer look into it for this exact case. What are your thoughts on it given this new information available to you?
Curious who that lawyer is. Because for financial arbitration, the win rates are ridiculously skewed in favour of borrowers and retail investors.
I'd like to read it and add it to this list: https://arbitrationinformation.org/docs/references/
That said, I do know bank lobbying group who want to outlaw arbitration for unaccredited investors. Will pass this along.
[1] https://arbitrationinformation.org/docs/problems/
To the extent possible id like to strongman arbitration but need to find sources.
Someone angling to go into coding should be able to do the research to draft an arbitration claim on their own. In most cases that isn’t a fair assumption to make, but given the cohort, they should be able to collaborate on a draft.
The gating part isn’t doing the work. It’s knowing you have the option to.
Unless you’re a total numpty, you can learn online how to draft an arb claim. And even if you are a numpty, you should be be to find—in a half-decent cohort—someone who can do this.
The issue is rarely ability. It’s learned helplessness in the face of the legal system. The anxiety, not ability, is the limiting factor.
It is. I won't because this isn't something I care deeply about. The question is whether they would have been better off without arbitration, and the answer is no.
This is also an area I care deeply about. And have read north of 2000 pages of cases, analysis, and position papers on the topic.
I also have a list of about 90 more documents to read. Slow but steady progress.
I honestly can't think of a clearer example of arbitration agreements screwing people over.
https://www.reviewjournal.com/opinion/editorials/editorial-c...
normal name - normal spelling - ok weird name - normal spelling - ok weird name - weird spelling - ok normal name - weird spelling - no go
I don't want to hear some Jane Austen excuse either.
There’s a lot more consistency in the backstory of Silicon Valley than I realized.
There’s certainly an amazing culture of visionaries and innovation and creative people as well, it’s worth noting that, but there’s a deep history of sociopathic business practices as well that goes back 100+ years and is core to the identity of the Valley in general and Stanford in particular.
It doesn't matter what your political leanings are or what you think about the matter at hand. No agency should have the much power to be the judge jury and executioner. Oh and also to just write laws at a whim.
This is really not cool. I have no idea how anybody who calls them selves an American can be cool with this.
> The investment is largely coming from Gigafund, the VC started by ex-Founders Fund partners in 2017 originally to put more money into SpaceX, with Tandem Fund and Y Combinator (where Lambda School was incubated) also participating. Its list of other backers include GV, GGV, and Stripe. (Tommy Collison, the head of business development at Lambda, is the younger brother of the two Collison brothers who co-founded Stripe.)
https://techcrunch.com/2020/08/21/lambda-school-raises-74m-f...
Paul Graham, 2022: "Of 1277 students who graduated from Lambda School in 2020 and sought jobs, 950 got them, for a placement rate of 74.8%.
(Lambda's weirdly dedicated haters will be happy to hear that these numbers were audited by an accounting firm.)" [2]
[1] https://twitter.com/paulg/status/1254809755681525762
[2] https://twitter.com/paulg/status/1254809755681525762
Need to know number of people who started program and number of people who got jobs at the end.
> Allred tweeted that the school achieved a 100 percent job-placement rate in one of its cohorts, and later acknowledged in a private message that the sample size was just one student.
> I did say the hiring rate of a cohort of one student was 100%. And in the same tweet I said, in all caps BUT VERY SMALL SAMPLE SIZE. Odd how that doesn’t make the article, don’t you think?
https://news.ycombinator.com/item?id=26813371
Incidentally, it did make it into the article he's referring to, twice.
I wish I was kidding.
Like the only thing he knows how to do is fudge things with dark patterns to achieve growth at any cost
"For a few months in 2013, Allred camped out of his car while in Silicon Valley, and frequently describes this period as having been homeless. However, a deleted post on his blog titled 'Voluntarily Homeless in Silicon Valley' explains that he lived out of a car by choice."
Uhh, when people talk of living out of a vehicle in the context of homelessness, they're talking about people parked in the back corner of a Walmart lot with their laundry and many earthly possessions beside them, not social media creators making YouTube videos for "#vanlife".
https://www.applieddivinitystudies.com/lambda-lies/
https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes...
> BloomTech falsely claimed its “income share” agreements were not loans, did not create debt, did not carry a finance charge, and were “risk free.” In fact, the agreements are loans with an average finance charge of $4,000. The loans carry substantial risk, as a single missed payment triggers a default and the remainder of the $30,000 “cap” becomes due immediately. BloomTech further hid the cost and nature of the “income share” loans by not disclosing key terms like the finance charge and annual percentage rate, as required by law.
Student loans from a legitimate lender don't come with balloon payments, the APRs and any finance charges are clearly disclosed, etc., and they're not making up graduation rates.
"(job) can earn (x) dollars a year!"
When in reality that career is losing jobs and less than 10% of graduates get one. Anything what would have you work in a museum would probably meet this criteria.
Alternative is they told the truth, everyone went in with eyes wide open and everyone is responsible for their own student loans.
If a reputable college really wants a student to attend, their financial aid office will generally find a way to lower your costs. Or else they will deny your application, or at best load you up with ugly Parent PLUS loans.
I recently met a liberal arts student from an Ivy League university who has been under-employed for twenty years. She still has unpaid student loans and she graduated in 2007! She has had to work in retail positions from time to time. And she's considering retraining via a vocational school to be an electrician because that's what her father and brothers do and they make 300K+ a year via the family business.