(Note: I was a founder at a coding bootcamp, Hack Reactor.)
I don't think an author who understands the domain would write like this. Even if we spot that Lambda was a tire fire that needed to die, the author's outrage doesn't square with realities on the ground in other sectors of postsecondary education, especially in programs that serve lower-income students. I wouldn't launch a general defense of Lambda/Allred but I think the following notes from a practitioner might be interesting.
Postsecondary employment stats are inaccurate across the board and intrinsically hard. In the real world I am mostly only aware of job stats that could be called "fake", and those which are not published. Hiring stats are surprisingly tough to get right and I would wager that the majority of public job stats would be called fake by the man on the street. For example, if you've seen a law school employment statistic, it probably includes (as "hired") all the people who work in another field, or who work part time, or who work on a "contract", etc. As a domain expert I can tell you there is no easy way to legislate this number's production (or outlaw the use of such stats) in a way that generates the outcomes you want, or which vindicates and villainizes the correct schools. Some state regulators make it illegal to publish or market job placement statistics; other state regulators make it mandatory! California's BPPE (for eg) posts them all publicly and a brief review will confirm that there are obvious incorrect filings which the regulator publishes without challenge. Accredited higher ed generally does not have direct state or federal regulatory oversight or rules on hiring stats. My personal opinion is that publishing and marketing hiring stats is good, actually -- even in an imperfect regime, which is the only way to do it -- but my broader point is that well-intended regulatory bodies haven't figured this out yet, and in any case the numbers are all wrong in the same ways that are cited here in shocked tones. Also would you be shocked if your local community college had reported 10% in-field employment? Note that "graduation" and "enrollment" are equally squiggly and intrinsically a part of the same statistic.
Sizable portions of debtholders are (or appear) surprised, unhappy, and/or obviously cheated by profit-taking lenders. I think a lot of us are frustrated that students are faced with impossible choices about debt. Many would say "public payment is the only moral system" but that argument isn't clearly stated here. (As an aside, publicly-funded higher ed tends to exclude poor students, both under the status quo and under proposals for publicly-funded higher ed. This is accomplished through insidious rationing of four-year and graduate institutions, and weak services for working students. Working-class Bachelors' students are routed to University of Phoenix and get $100k+ of debt instead of subsidized in-state tuition.) Putting aside the public funding dream, student debt is how we fund schools today, and vanilla debt has the same issues as ISAs (which are a type of debt). I can't speak to Lambda's ISA structure or administration but I have some general comments about ISAs. An ISA is a newfangled kind of debt that is legally restricted from being very different from debt. (It's basically a vanilla debt, bundled with an insurance product that pays if the alum earns less than $X, and costs extra if the alum earns more than $Y. The insurance can't legally carry high fees, so it can't refund many grads, and complicated administration and adverse incentives also cost a lot. In practice there will be winners and losers vs vanilla debt.) ISAs and conventional debt can be designed well or poorly, and explained well or poorly, but the author is outraged about things which happen abundantly in all these circumstances. I signed college debt paperwork; I griped about the parts I had understood, and the parts I hadn't understood; profit-seeking firms bought and sold my debt and tossed me about on their careless seas. I can personally report that informed low-income students generally love ISAs (the debt-plus-downside-insurance product), and usually dislike vanilla debt, and for this reason I like ISAs at least as much as vanilla debt.
Schools that serve lower-income students are disproportionately judged negatively by middle-class audiences, often with malign motives and/or malign emergent outcomes. Depending on how you lawyer the details, you could say that 90% of community college students waste time and money and never see any benefit. (And they're in a government-subsidized program and only paying a minority of true costs!) I would find that kind of lawyering to be holistically untrue, but I don't think normal people have grounded intuitions about what is normal and OK, and how that is influenced by class and income, part-time vs full-time, accredited vs unaccredited, etc. Many people aren't aware that there is more demand for BA/BS programs than there are subsidized schools -- doubly so if the student is working and lower-class -- and this is the normal audience for for-profit universities. The world's best institution for this audience would have bad employment stats, as compared to a bad b-tier state school, and as compared to middle-class attitudes about predation. Are lower-income students better served if we pass laws against low-success programs, or institute price caps, etc? I observe that schools which serve poor students appear dirty and compromised in myriad ways, even when they are operating at the top or the middle of curve in terms of execution. This shows up in employment stats, in student complaints about debt (rich kids just pay), in employee morale and pay grade, etc. Again, this is true of great schools that serve a vulnerable audience. (Not saying that's the case here. I honestly don't know where Lambda is on the curve, and I honestly don't know which Universities of Phoenix should be shut down. And I'm a domain expert!)
In conclusion: If this author were an all-powerful regulator, what % of postsecondary programs for low-income students would get shut down? (After examining the facts.) Would this benefit low-income students? I honestly don't know and there are no simple answers, but even if I assume that Lamda is an outlier that needs to die, I don't think an author who understands the landscape would write like this.