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Lambda School agrees to end deceptive educational financing practices

dfpi.ca.gov

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Re: Lambda School agrees to end deceptive educational financing practices

#11

Post by luckylion »

srndsnd wrote: post #6

I'm confused as to why this headline has to be so close to clickbait. I'm not even one to stand up for people like Lambda, I think a lot of bootcamps are shady at best, and actively deceptive at worst (Trilogy). It is definitely important to note that that these loans can be discharged in bankruptcy. But as far as I know, isn't this less stringent than typical student loans, which can't be discharged in bankruptcy? I…

> But as far as I know, isn't this less stringent than typical student loans, which can't be discharged in bankruptcy?

That's the point, I believe. Lambda School was pretending their loans were protected from bankruptcy proceedings so students wouldn't consider it.

It's somewhat common for corporations to pretend that laws don't exist. Even if only half of the customers believe them and don't sue, they'll save money.

Re: Lambda School agrees to end deceptive educational financing practices

#12

Post by elliekelly »

srndsnd wrote: post #6

I'm confused as to why this headline has to be so close to clickbait. I'm not even one to stand up for people like Lambda, I think a lot of bootcamps are shady at best, and actively deceptive at worst (Trilogy). It is definitely important to note that that these loans can be discharged in bankruptcy. But as far as I know, isn't this less stringent than typical student loans, which can't be discharged in bankruptcy? I…

“Deceptive practices” is a commonly used legal term in consumer protection. It’s often used in conjunction with “unfair business practices” or “unfair and deceptive practices” depending on the state and what has been alleged.

Re: Lambda School agrees to end deceptive educational financing practices

#13

Post by nrmitchi »

This headline feels overly clickbait:

> The settlement is the result of a DFPI investigation that found that Lambda was engaged in conduct that violated the new law.

So a new law was created, that Lambda was in violation of, and agreed to update their materials to comply with the new law?

This is kind of implying that Lambda was previously breaking the law, which doesn't really seem to be the case?

As well, Lambda stating that ISA's are not dischargable in bankrupcy when they actually are is probably the least shady "deceptive" marketing practice I've heard of from bootcamps and code-schools.

Re: Lambda School agrees to end deceptive educational financing practices

#14

Post by detaro »

srndsnd wrote: post #6

I'm confused as to why this headline has to be so close to clickbait. I'm not even one to stand up for people like Lambda, I think a lot of bootcamps are shady at best, and actively deceptive at worst (Trilogy). It is definitely important to note that that these loans can be discharged in bankruptcy. But as far as I know, isn't this less stringent than typical student loans, which can't be discharged in bankruptcy? I…

If you agree that it's an important detail, how is misrepresenting their status in the contract, and thus misleading people about their rights, not deceptive?

Re: Lambda School agrees to end deceptive educational financing practices

#15

Post by yawnxyz »

renewiltord wrote: post #5
yawnxyz wrote: post #2

"contains a provision that falsely asserts that the Contract is a “qualified educational loan” ..." Did University of Phoenix qualify for "educational loans"? I'm constantly surprised why this sector gets a pass like this from bankruptcy.

The reason is that the applicants would not be loaned anything if they could discharge debt in bankruptcy. i.e. student loans would not exist unless collateralized and we don't want people to have to put up collateral equal to the value of the loan. This is because if I were a student, the optimal route would be to take the largest loan possible while on no assets, then go to the most expensive university, then decla…

So this just creates an incentive to push as many kids through school as possible and to take out the biggest loans, right?

Shouldn't there be a metric built in that says something like "the quality of education didn't meet the expectations of the loan, so the loan can be discharged"?

Where's the warranty for the lender?

Re: Lambda School agrees to end deceptive educational financing practices

#16

Post by nrmitchi »

renewiltord wrote: post #5
yawnxyz wrote: post #2

"contains a provision that falsely asserts that the Contract is a “qualified educational loan” ..." Did University of Phoenix qualify for "educational loans"? I'm constantly surprised why this sector gets a pass like this from bankruptcy.

The reason is that the applicants would not be loaned anything if they could discharge debt in bankruptcy. i.e. student loans would not exist unless collateralized and we don't want people to have to put up collateral equal to the value of the loan. This is because if I were a student, the optimal route would be to take the largest loan possible while on no assets, then go to the most expensive university, then decla…

For what it's worth (I learned this recently and was equally surprised by it) student loans were not non-dischargable until 2005. Ie, for all time before 2005, a student could do what you describe, and as far as I know it wasn't a widespread practice.

It is a relatively new thing that really only came in to existance coincidentally around the same time that education became so expensive that going through the effort of bankrupcy became "worth it".

Re: Lambda School agrees to end deceptive educational financing practices

#17

Post by dhdhhdd »

renewiltord wrote: post #5
yawnxyz wrote: post #2

"contains a provision that falsely asserts that the Contract is a “qualified educational loan” ..." Did University of Phoenix qualify for "educational loans"? I'm constantly surprised why this sector gets a pass like this from bankruptcy.

The reason is that the applicants would not be loaned anything if they could discharge debt in bankruptcy. i.e. student loans would not exist unless collateralized and we don't want people to have to put up collateral equal to the value of the loan. This is because if I were a student, the optimal route would be to take the largest loan possible while on no assets, then go to the most expensive university, then decla…

And so the education would get cheaper. Nothing drives up prices more than easy access to big loans.

Re: Lambda School agrees to end deceptive educational financing practices

#18

Post by pseudalopex »

nrmitchi wrote: post #13

This headline feels overly clickbait: > The settlement is the result of a DFPI investigation that found that Lambda was engaged in conduct that violated the new law. So a new law was created, that Lambda was in violation of, and agreed to update their materials to comply with the new law? This is kind of implying that Lambda was previously breaking the law, which doesn't really seem to be the case? As well, Lambda st…

The headline implies the practices were deceptive before they were illegal. It doesn't imply they were breaking the law previously.

Re: Lambda School agrees to end deceptive educational financing practices

#19

Post by pseudalopex »

tunesmith wrote: post #8

Reading this, I'm actually not sure if Lambda implied the tuition wasn't dischargeable in bankruptcy when it actually is, or the other way around. If you sign up for Lambda and then go bankrupt, do you still have to pay them back?

They implied it couldn't be discharged. It can apparently.

Re: Lambda School agrees to end deceptive educational financing practices

#20

Post by nrmitchi »

pseudalopex wrote: post #18
nrmitchi wrote: post #13

This headline feels overly clickbait: > The settlement is the result of a DFPI investigation that found that Lambda was engaged in conduct that violated the new law. So a new law was created, that Lambda was in violation of, and agreed to update their materials to comply with the new law? This is kind of implying that Lambda was previously breaking the law, which doesn't really seem to be the case? As well, Lambda st…

The headline implies the practices were deceptive before they were illegal. It doesn't imply they were breaking the law previously.

I didn't realize the HN headline was different than the linked article, which is "Lambda School Reaches Settlement with DFPI, Agreeing to End Deceptive Educational Financing Practices".

"Reaching a settlement" with an enforcement agency implies, at least to me, that you were acused of breaking a law.

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