Lambda School agrees to end deceptive educational financing practices • Hacker News Board

Re: Lambda School agrees to end deceptive educational financing practices

#251

Post by dragonwriter » Tue, Apr 27, 2021, 6:33 AM UTC

pbreit wrote: post #245

dragonwriter wrote: post #222

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? 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.

> So basically, California specifically forced them to create a special contract, different from the one they use everywhere else, that couldn’t be discharged

No, again, the specific lie that they are getting in trouble with is claiming that the California contract was a “qualified education loan” which could not (easily) be discharged in bankruptcy when, in fact, it was a regular unsecured loan which can easily be discharged in bankruptcy.

Re: Lambda School agrees to end deceptive educational financing practices

#252

Post by commander_woof » Tue, Apr 27, 2021, 6:35 AM UTC

dehrmann wrote: post #228

40four wrote: post #215

It makes me sad that many of the prominent boot-camps now have such a bad reputation, and seem to be run so poorly, or recklessly. I feel lucky to have enrolled at, now defunct, The Iron Yard at it’s peak in the end of 2016. I owe them everything for teaching me and coaching me into how to break into my new career as a web developer. It was life changing. I can only speak for my particular campus, but I imagine it wa…

I wonder if there was a gold rush when bootcamps started because there was a pool of motivated people with potential who needed training and help getting into the industry. Once that pool was gone, the only new people entering it are basically high school graduates, so in order to keep operating, bootcamps had to get scammier and lower their standards. I have no evidence of this, but it seems plausible.

There absolutely was a gold rush at the beginning! I believe it started with Dev boot camp in SF. Many of the students in the first cohort split off after graduation and made their own schools. If I recall correctly the person who started App Academy was a DBC grad. Anyways, imagine that, some one who just learned to code, now running their own unaccredited program. Scam is too strong of a word for these programs. They were just amateurs really. Add in a little silicon valley hustle and now you have a nice little pressure cooker where they need to start hitting enrollment and graduation numbers. It also didnt help they were in one of the most expensive real estate locations in the world.

Re: Lambda School agrees to end deceptive educational financing practices

#253

Post by rtx » Tue, Apr 27, 2021, 6:39 AM UTC

raverbashing wrote: post #250

koolba wrote: post #211

Earlier quoted context omitted.

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.

Real argument is no one will loan to students, most of them aren't credit worthy.

Re: Lambda School agrees to end deceptive educational financing practices

#254

Post by gadf » Tue, Apr 27, 2021, 6:40 AM UTC

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…

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Re: Lambda School agrees to end deceptive educational financing practices

#255

Post by akanet » Tue, Apr 27, 2021, 7:10 AM UTC

aerosmile wrote: post #77

sicromoft wrote: post #40

See also Lambda School’s Misleading Promises: https://nymag.com/intelligencer/2020/02/lambda-schools-job-p...

I would be a lot more inclined to believe anything they said in this article if they didn't show such blatant bias for sensationalist reporting. > His previous work was mostly concerned with “growth hacking,” which is Silicon Valley jargon for finding underappreciated (or, less charitably, underhanded) ways of marketing something. So anyone who put the term "growth hacking" on their resume will now get publicly discr…

Listen, I wrote underappreciated first and then had the parenthetical second for a reason. You read the entire piece and this is the bit you reacted to? Jesus Christ. The entire piece is completely factual. Name even one bit of the piece not based entirely in fact, I dare you.

Re: Lambda School agrees to end deceptive educational financing practices

#256

Post by akanet » Tue, Apr 27, 2021, 7:11 AM UTC

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…

Austen call me we can work through this gaffe

Re: Lambda School agrees to end deceptive educational financing practices

#257

Post by kelnos » Tue, Apr 27, 2021, 7:27 AM UTC

musicale wrote: post #197

jfrunyon wrote: post #78

Earlier quoted context omitted.

> 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 t…

You can thank a truly gross lobbying effort that culminated in a bill[0] passed in 2005 intended to curb "bankruptcy abuse" (a thing that was not actually a thing), and, among other things, greatly restricted how educational loans could be discharged in bankruptcy.

[0] https://en.wikipedia.org/wiki/Bankruptcy_Abuse_Prevention_an...

Re: Lambda School agrees to end deceptive educational financing practices

#258

Post by kelnos » Tue, Apr 27, 2021, 7:36 AM UTC

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.

True, but I think it's important to acknowledge that those practices, regardless of their prior legality, were predatory. If it was an honest mistake about something that wasn't a big deal, I don't think many people would be up in arms about it. But these particular circumstances lead me to believe Lambda is a pretty scummy organization.

They're only agreeing to change their language because they were previously lying, and now there could be regulatory and financial consequences for them if they don't change it.

Re: Lambda School agrees to end deceptive educational financing practices

#259

Post by kelnos » Tue, Apr 27, 2021, 7:48 AM UTC

pbreit wrote: post #245

dragonwriter wrote: post #222

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? 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.

I get the feeling you're arguing in bad faith here due to some axe you have to grind with California, but I'll try to clarify.

Lambda was deceptive about the terms of their ISA (the one they now use everywhere but CA). CA's laws require lenders to disclose certain things to their customers, and Lambda didn't want to do that.

So, being the childish dicks they so clearly are, they retaliated by creating new terms that are worse for CA-based students. No one forced them to do this; they could have kept the same contract but properly disclosed the things they were required to disclose. And on top of that, they lied about whether or not their loans could be discharged in bankruptcy. This particular regulatory action is solely about this last thing.

Re: Lambda School agrees to end deceptive educational financing practices

#260

Post by lawtalkinghuman » Tue, Apr 27, 2021, 7:50 AM UTC

istjohn wrote: post #224

koolba wrote: post #211

Earlier quoted context omitted.

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.

I'm honestly curious why this isn't a problem in the UK. What are we missing?

Historically, it is because UK government-backed student loans (for English students: no student fees in Scotland after all) are (a) low-interest, (b) only repayable on money earned above a particular salary threshold, and (c) automatically gets written off eventually after a specified period (was 25 years, now 30 years).

(a) is arguably not really true anymore (given some graduates are paying 5% interest), but (b) is even more true now than it was under the old (Plan 1) scheme because the salary threshold is now £27,295 (compared to the old one of £19,985).