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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

#191

Post by bdcravens »

mox1 wrote: post #188
pugio wrote: post #181

Earlier quoted context omitted.

Could you comment a bit more about Trilogy? From what I understand, they provide a bootcamp as a service to be offered by other institutions, such as universities around the world. Do you have any personal experience of their deception or lack of quality?

Agreed hopefully we get a response. I was an instructor for Trilogy, didn't really see any 'deceptive practices' in my couple years there.

For many bootcamps, the deception is in the marketing about job and salary prospects, as well as padding the hiring statistics by giving jobs to graduates and counting those jobs towards those marketing numbers.

Re: Lambda School agrees to end deceptive educational financing practices

#192

Post by sandofsky »

LMYahooTFY wrote: post #185
sandofsky wrote: post #183

Earlier quoted context omitted.

> I'm curious if there's a way you can mess up language in a contract that isn't deceptive/misleading? According to the linked document, this was not a typo. This line contradicts reality: "this extension of credit is a qualified educational loan and is subject to the limitations on dischargeability in bankruptcy contained in Section 523(a)(8) of the United States Bankruptcy Code." In addition, the document points ou…

>According to the linked document, this was not a typo. This line contradicts reality: "this extension of credit is a qualified educational loan and is subject to the limitations on dischargeability in bankruptcy contained in Section 523(a)(8) of the United States Bankruptcy Code." This in no way answered my question. >In addition, the document points out, "Certain Lambda School marketing has included representations…

> This in no way answered my question.

I can't believe I have to make this explicit, but ok.

> I'm curious if there's a way you can mess up language in a contract that isn't deceptive/misleading?

Reading the contract, a student will think that they can't discharge the debt through bankruptcy. In reality, yes, they can discharge the debt through bankruptcy. It's right there in the order:

"The Bankruptcy Non-Dischargeability Provision is misleading because, contrary to the Dischargeability Provision, the Contract is not a “qualified educational loan,” as defined in section 221, subdivision (d)(1), of the Internal Revenue Code of 1986, and is not subject to the limitations on dischargeability pursuant to section 523, subdivision (a)(8), of the United States Bankruptcy Code."

A 'mess up' would be misuse of an Oxford comma. You don't 'mess up' dropping a very specific reference to a very specific legal code that does not apply.

> Interesting and not related to the contract, we're talking about marketing. I find your comments extremely disingenuous, you're switching contexts of "misleading" in the very separate domains of marketing and legal contracts which should be too obvious.

The order cites their deceptive marketing. Presumably that's why they were ordered to review all of their previous marketing.

> The order is non-specific, so what do you want to get into?

I copied and pasted directly from the order.

> You picked out endorsement, and responded as if he had said "BPPE endorsed our program". It's clearly not what he said.

I copied and pasted from his own post.

Since we can't reach common ground on basic facts, I see no reason to engage with you any further.

Re: Lambda School agrees to end deceptive educational financing practices

#193

Post by bdcravens »

songqin wrote: post #44
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…

What do you specifically find deceptive about Trilogy? Just curious, as I see them around me a lot.

I can't speak to Trilogy specifically, but for many bootcamps, the deception is in the marketing about job and salary prospects, as well as padding the hiring statistics by giving jobs to graduates and counting those jobs towards those marketing numbers.

Re: Lambda School agrees to end deceptive educational financing practices

#195

Post by devmunchies »

sandofsky wrote: post #53
austenallred wrote: post #29

Hey everyone, Pretty excited to reach settlement on this one. The DFPI is a new regulatory agency in California that was tasked with reviewing Lambda School’s new incentive-aligned tuition ( https://lambdaschool.com/tuition/tuition-options ) in California. They came back requesting that we update a bankruptcy provision in the agreement to clarify that these agreements are dischargeable in bankruptcy, and to do a revi…

This is a bizarre response. You were caught putting deceptive language in your contracts. You now have to hire a third-party to ensure all of your contracts comply with the law, and 90 days to review all of your previous marketing material and certify it wasn't dishonest. You're on probation. This is nothing to be excited about. This is similar to when you fought with the BPPE for a year because they insisted you can…

I don't know anything about lambda school outside the HN threads but it seems like you're in every lambda school thread going back 'n forth with allen. kinda funny honestly.

makes your arguments seem a little less credible since you clearly have a bone to pick but like I said, I don't know anything about lambda school. maybe you're justified, idk.

Re: Lambda School agrees to end deceptive educational financing practices

#196

Post by DangitBobby »

pbreit wrote: post #190
DangitBobby wrote: post #175

Isn't lying to trick people for financial gain to their detriment fraud? > Fraud is an intentionally deceptive action designed to provide the perpetrator with an unlawful gain or to deny a right to a victim. Types of fraud include tax fraud, credit card fraud, wire fraud, securities fraud, and bankruptcy fraud. Fraudulent activity can be carried out by one individual, multiple individuals or a business firm as a whol…

Not clear to me that they were lying. Also not clear they had anything to gain.

My reading of it is that their contract claimed student debt with the school could not be discharged with bankruptcy similar to federal student loans. This is not true, and it's doubtful that the people writing the contract didn't know that it wasn't true. If they were being intentionally deceitful, which I believe is the claim here, it would be to prevent loss of loan-repayment in the case that a student finds the debt to be too burdensome and wishes to instead file for bankruptcy. Why else would they include it in the contract if it weren't to their benefit to discourage the student from discharging their debt? All that's left is to prove the intent to decieve.

Re: Lambda School agrees to end deceptive educational financing practices

#197

Post by musicale »

jfrunyon wrote: post #78
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…

> 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? Is the point here that there was a population of Lambda students who weren't aware they could discharge their loan, and this contract prevision was preventing them from doing so? Or was the school deliberately m…

Although it is harder to discharge student loans in bankruptcy, as I understand it they can be discharged in bankruptcy if the borrower can prove undue hardship (probably hard to do, especially with income-based repayment) or if 7 years have elapsed since the start of repayment.

This does seem to violate the spirit of bankruptcy law as well as basic economics (presumably student loans consist of and are repaid with the same dollars that are used for other loans or unsecured debt) and has almost certainly helped universities raise tuition with impunity for decades while student loan debt has ballooned to more than $1T in the US.

Re: Lambda School agrees to end deceptive educational financing practices

#198

Post by hluska »

DoreenMichele wrote: post #138

The language violates the new California Consumer Financial Protection Law (CCFPL), which took effect this year At the risk of being misconstrued as defending predatory practices, it sounds like they quickly reached an agreement to comply with legal stuff that probably didn't exist when they wrote the language that's being updated.

That seems accurate. Consumer protection laws are a genuine mess - it’s okay to lie about some things and not okay to lie about others. Some lies are meant to be dealt with in civil court whereas others are meant to be dealt with by regulators. That line moves back and forth every few years.

Re: Lambda School agrees to end deceptive educational financing practices

#199

Post by dragonwriter »

kethinov wrote: post #96
jfim wrote: post #92

Earlier quoted context omitted.

> Lambda claimed this thing wasn't dischargeable in bankruptcy, the state of California says actually it is. Okay, fine. It doesn't mean Lambda was doing something malicious. Maybe I'm missing something, but if someone were in the unfortunate position to be considering bankruptcy, wouldn't knowing whether this loan is actually dischargeable or not be a big deal to them? It seems like it would be.

It's not a loan, it's an income share agreement. Someone facing bankruptcy is unlikely to be making enough income to be subject to ISA repayment which only comes into effect if the student is earning above the threshold for it. I really don't get why some people dislike ISAs. They're way better than student loans.

> It's not a loan, it's an income share agreement.

(1) The “Income share agreement” is a $30K loan with various wrinkles,

(2) Lambda School, for legal reasons, doesn’t use ISAs in California, but a somewhat less obfuscated $30,000 loan, the “Retail Installment Contract”.

> I really don't get why some people dislike ISAs. They're way better than student loans.

They aren’t better than federal student loans, which have an optional income driven repayment plans, which are a similar or lower percentage of discretionary income than most ISAs are of total income.

They may sometimes be better than the available nonfederal loans for people attending institutions not qualified for federal loans, but that’s a pretty low bar.

Re: Lambda School agrees to end deceptive educational financing practices

#200

Post by imgabe »

DangitBobby wrote: post #196
pbreit wrote: post #190

Earlier quoted context omitted.

Not clear to me that they were lying. Also not clear they had anything to gain.

My reading of it is that their contract claimed student debt with the school could not be discharged with bankruptcy similar to federal student loans. This is not true, and it's doubtful that the people writing the contract didn't know that it wasn't true. If they were being intentionally deceitful, which I believe is the claim here, it would be to prevent loss of loan-repayment in the case that a student finds the d…

But Lambda already forgoes loan repayment if the student doesn't get a job making at least $50k. So why would they go about trying to collect loans from people declaring bankruptcy when they already give up on loans in other circumstances where they would be much easier to pursue?

It seems like Lambda was just genuinely confused about what the regulations were regarding their loans and whether they could be discharged in bankruptcy. The regulator clarified that they could, and they updated their agreement to reflect that.

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