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Lambda School agrees to end deceptive educational financing practices

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Re: Lambda School agrees to end deceptive educational financing practices

#241

Post by judge2020 »

tedivm wrote: post #230
judge2020 wrote: post #106

Earlier quoted context omitted.

Neither of us are lawyers (based on your profile), but there are two modern forms of bankruptcy in the U.S: Chapter 7, liquidation which does discharge your debts, or Chapter 13, which is restructuring. In a chapter 7 bankruptcy, you have to pass the means test, which checks if your household income is below the median income of your state: > The means test looks at the gross income of everyone in your household duri…

Chapter 7 has an abuse provision which people also have to pass or the bankruptcy can be turned into a Chapter 11 or Chapter 13 (or gets dismissed outright). To quote the law directly- > After notice and a hearing, the court, on its own motion or on a motion by the United States trustee, trustee (or bankruptcy administrator, if any), or any party in interest, may dismiss a case filed by an individual debtor under thi…

Do you know how often this has been used and isn’t some dead piece of law never cited (like a lot of law is)?

Re: Lambda School agrees to end deceptive educational financing practices

#242

Post by LMYahooTFY »

sandofsky wrote: post #85
davidw wrote: post #37

Earlier quoted context omitted.

What's he supposed to do? Rant about the government? Making the best of it and moving on is probably the best move, since it doesn't sound like a big hit to their business. Also, it looks like you get out of Lambda School debts via bankruptcy, which you don't with regular college, so that's... an improvement?

> What's he supposed to do? Apologize. > Also, it looks like you get out of Lambda School debts via bankruptcy, which you don't with regular college, so that's... an improvement? "You can't discharge student debt," is actually a myth. I have two relatives that discharged their loans due to financial hardship. It isn't trivial, but there's a process. The issue with ISAs, in their current form, is the lack of legal fra…

I imagine you might ignore me here since you opted out of our other thread, but I'd like to ask:

What specific issues do you have with the ISA?

Re: Lambda School agrees to end deceptive educational financing practices

#243

Post by LMYahooTFY »

luckylion wrote: post #7

Why is it a settlement, were the regulators not sure that they violated the law and sought compromise? It sounds like "Lambda School agrees to comply with the law" which implies that doing so is optional.

More or less, yes, the regulators have a heavily bureaucratic process that's far more legally rigorous for dealing with large corporate entities and their legal teams than something like a municipal health inspector.

Re: Lambda School agrees to end deceptive educational financing practices

#244

Post by Ansil849 »

bdcravens wrote: post #193
songqin wrote: post #44

Earlier quoted context omitted.

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.

> padding the hiring statistics by giving jobs to graduates and counting those jobs towards those marketing numbers.

I see this brought up quite a bit, and I don't really see the issue. They are offering their graduates jobs, so why should these jobs not count just like any other jobs?

Re: Lambda School agrees to end deceptive educational financing practices

#245

Post by pbreit »

dragonwriter wrote: post #222
imgabe wrote: post #218

Earlier quoted context omitted.

So basically, California specifically forced them to create a special contract, different from the one they use everywhere else, that couldn't be discharged and then censured them for not clearly enough stating that the special California contract couldn't be discharged? Sounds very California.

> So basically, California specifically forced them to create a special contract, different from the one they use everywhere else, that couldn't be discharged and then censured them for not clearly enough stating that the special California contract couldn't be discharged? No, not at all. They choose not to automatically discharge the California contracts after 60 months of deferment for low income (I believe as a ba…

So basically, California specifically forced them to create a special contract, different from the one they use everywhere else, that couldn't be discharged and then censured them for not clearly enough stating that the special California contract couldn't be discharged?

Sounds very California.

Re: Lambda School agrees to end deceptive educational financing practices

#246

Post by pbreit »

dragonwriter wrote: post #208
pbreit wrote: post #201

Earlier quoted context omitted.

Treatment of student loans in bankruptcy not limited to government loans. The clause makes Lambda appear less attractive so not clear why it would be included. Would be nice to hear Lambda’s side.

> The clause makes Lambda appear less attractive so not clear why it would be included. It’s designed to dissuade people from seeking bankruptcy to discharge the debt.

I doubt it. Who would seek bankruptcy for 17% of their salary? And it also make Lambds FAR more unattractive.

Re: Lambda School agrees to end deceptive educational financing practices

#247

Post by pbreit »

nl wrote: post #237
pbreit wrote: post #190

Earlier quoted context omitted.

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

> Also not clear they had anything to gain. The resell the debt to investors[1]. If students think these debts have to be repaid even if they don't then they are more valuable so yes, the school has something to gain. [1] https://inside.com/campaigns/inside-dev-2020-02-13-21344/sec...

They don't resell all the debt. And this make Lambda FAR less attractive. And if someone is going into bankruptcy it would be over far more than 17% of their salary. In which case they would find out if it's dischargeable or not.

Re: Lambda School agrees to end deceptive educational financing practices

#248

Post by boldslogan »

Ansil849 wrote: post #244
bdcravens wrote: post #193

Earlier quoted context omitted.

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.

> padding the hiring statistics by giving jobs to graduates and counting those jobs towards those marketing numbers. I see this brought up quite a bit, and I don't really see the issue. They are offering their graduates jobs, so why should these jobs not count just like any other jobs?

Because the only way that would continue to work is they got more new students (at the bottom) to pay for the old students (at the top) jobs and it (the pyramid) would fall apart.

In other words it looks like a pyramid scheme if the grads only get jobs as teachers.

Re: Lambda School agrees to end deceptive educational financing practices

#249

Post by pbreit »

dragonwriter wrote: post #210
imgabe wrote: post #200

Earlier quoted context omitted.

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 discharge…

> But Lambda already forgoes loan repayment if the student doesn't get a job making at least $50k. No, it doesn’t, ever , for the California Retail Installment Contract at issue. Their ISA, defers for five years and then discharges.

I think you're right. The California regulator forced Lambda to make the agreement much worse for California students. Can we fine the regulator (which is totally useless, btw)?

https://www.forbes.com/sites/prestoncooper2/2020/08/21/calif...

Re: Lambda School agrees to end deceptive educational financing practices

#250

Post by raverbashing »

koolba wrote: post #211
ClumsyPilot wrote: post #178

Earlier quoted context omitted.

"loans can be discharged in bankruptcy." To me the idea that in a 'free country' today you cannot clear your debts through bancrupcy sounds crazy, it's a practice that belongs in history books along with debtor prisons, bondage, endentured servitude, feudalism, having public holiday 'execution day' and slavery. In the UK we used execute people for vagrancy.

The argument for it is that without it a graduate with a large balance could default on their loan immediately after graduation. The classic example being a surgeon getting hundreds of thousands in loans for medical school, and then skipping out on paying them back when they begin making bank as a doctor.

Yes and it's a BS argument, because going through bankruptcy is not something to be taken lightly or something that you can "just do", because it's not only about "you owe X" but how well can you service your debt.

Of course this argument was an excuse to inflate education prices and make lenders more interest as well.

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