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Lambda School’s Misleading Promises

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Re: Lambda School’s Misleading Promises

#21

Post by akanet »

hundt wrote: post #19

> Whether or not this counts as “selling” strikes me as a meaningless semantic distinction: Either way, the school receives some money up front and an investor shoulders some of the risk of the ISA not paying out. And either way, Lambda School students don’t know that the school isn’t as incentive-aligned with them as the school’s marketing indicates. It is certainly not meaningless! Selling an ISA means that Lambda…

The claim made to the student is not that they have some long minded financial alignment with the student cohort in aggregate - it's that specifically, the school does not make any money off the student (individually) until the student has an outcome.

Re: Lambda School’s Misleading Promises

#22

Post by beering »

hundt wrote: post #19

> Whether or not this counts as “selling” strikes me as a meaningless semantic distinction: Either way, the school receives some money up front and an investor shoulders some of the risk of the ISA not paying out. And either way, Lambda School students don’t know that the school isn’t as incentive-aligned with them as the school’s marketing indicates. It is certainly not meaningless! Selling an ISA means that Lambda…

It's not zero financial interest, but certainly more indirect and less compelling.

If investors in Lambda ISAs are not getting good returns, the value of buying a Lambda ISA will go down. If Lambda can't sell ISAs for a good price, they won't get the operating income they need or will have to shoulder the ISA themselves.

Still, selling the ISA just feels shady relative to the marketing that touts ISAs as aligning incentives.

Re: Lambda School’s Misleading Promises

#23

Post by hundt »

akanet wrote: post #21
hundt wrote: post #19

> Whether or not this counts as “selling” strikes me as a meaningless semantic distinction: Either way, the school receives some money up front and an investor shoulders some of the risk of the ISA not paying out. And either way, Lambda School students don’t know that the school isn’t as incentive-aligned with them as the school’s marketing indicates. It is certainly not meaningless! Selling an ISA means that Lambda…

The claim made to the student is not that they have some long minded financial alignment with the student cohort in aggregate - it's that specifically, the school does not make any money off the student (individually) until the student has an outcome.

Yes, and that is accurate; borrowing against a student's debt is not "making money" from the student. The transaction you describe does not hedge Lambda's risk; in fact it increases Lambda's risk because now if the student defaults they still need to pay interest as well.

Re: Lambda School’s Misleading Promises

#24

Post by hundt »

beering wrote: post #22
hundt wrote: post #19

> Whether or not this counts as “selling” strikes me as a meaningless semantic distinction: Either way, the school receives some money up front and an investor shoulders some of the risk of the ISA not paying out. And either way, Lambda School students don’t know that the school isn’t as incentive-aligned with them as the school’s marketing indicates. It is certainly not meaningless! Selling an ISA means that Lambda…

It's not zero financial interest, but certainly more indirect and less compelling. If investors in Lambda ISAs are not getting good returns, the value of buying a Lambda ISA will go down. If Lambda can't sell ISAs for a good price, they won't get the operating income they need or will have to shoulder the ISA themselves. Still, selling the ISA just feels shady relative to the marketing that touts ISAs as aligning inc…

Selling the ISAs would make it more indirect, but this article is referring to borrowing against the ISAs' future income, which does not make it more indirect.

Re: Lambda School’s Misleading Promises

#25

Post by akanet »

hundt wrote: post #23
akanet wrote: post #21

Earlier quoted context omitted.

The claim made to the student is not that they have some long minded financial alignment with the student cohort in aggregate - it's that specifically, the school does not make any money off the student (individually) until the student has an outcome.

Yes, and that is accurate; borrowing against a student's debt is not "making money" from the student. The transaction you describe does not hedge Lambda's risk; in fact it increases Lambda's risk because now if the student defaults they still need to pay interest as well.

that's a fair enough point, and I suppose I could have built the point more clearly in the article that I feel that the actual transgression is a misleading statement made to a student.

Re: Lambda School’s Misleading Promises

#26

Post by akanet »

hundt wrote: post #24
beering wrote: post #22

Earlier quoted context omitted.

It's not zero financial interest, but certainly more indirect and less compelling. If investors in Lambda ISAs are not getting good returns, the value of buying a Lambda ISA will go down. If Lambda can't sell ISAs for a good price, they won't get the operating income they need or will have to shoulder the ISA themselves. Still, selling the ISA just feels shady relative to the marketing that touts ISAs as aligning inc…

Selling the ISAs would make it more indirect, but this article is referring to borrowing against the ISAs' future income, which does not make it more indirect.

allred copped to straight up actually selling ISAs in the past (despite denials) as well

Re: Lambda School’s Misleading Promises

#27

Post by hundt »

akanet wrote: post #26
hundt wrote: post #24

Earlier quoted context omitted.

Selling the ISAs would make it more indirect, but this article is referring to borrowing against the ISAs' future income, which does not make it more indirect.

allred copped to straight up actually selling ISAs in the past (despite denials) as well

Yep, if Austen misled people that's bad. I am just disputing the argument that the later practice of using them as collateral for a loan is financially similar to selling them.

Re: Lambda School’s Misleading Promises

#28

Post by AquinasCoder »

akanet wrote: post #6

Hi, I'm the author of the piece, perhaps better known here as founder of CoderPad. Feel free to ask me anything but things are a bit crazy right now!

You mention that there's value in Lambda's mission, but I'm curious as to whether you believe that Lambda's business model is redeemable.

It's hard to argue that there's clearly a major risk involved in attending a program like this, but at the same time it seems to be working for some individuals. Would these high-achieving individuals be able to teach themselves? Possibly. But I'm not sure that going back to the traditional college route is the right choice either. And how can we better help those who lack the aptitude or enjoyment of programming and find out too late into these programs?

Re: Lambda School’s Misleading Promises

#29

Post by nkrisc »

About these ISAs: do they require any kind of good faith effort to find a tech job after completing the boot camp? If someone was just interested in tech, but worked in an unrelated field with no intention to switch, how would Lambda protect themselves? Obviously they could probably sue if there was bad faith on the student's part, but do these agreements address this scenario? Do they focus on screening students to avoid this?

Re: Lambda School’s Misleading Promises

#30

Post by codegeek »

I could be wrong but isn't Lamdba School a perfect example of destroying a noble idea due to the venture capitalish returns expected from the company ? If there wasn't so much pressure to grow that fast, perhaps they would have done a better job focussing on the quality and outcomes instead of growth at any cost ?
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