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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

#51

Post by detaro »

nrmitchi wrote: post #26
pseudalopex wrote: post #23

Earlier quoted context omitted.

Lambda School engaged in deceptive but apparently legal practices. A new law made them illegal. Lambda School continued to engage in the now illegal practices. The state began enforcement proceedings. The parties settled.

Part of my point, that I did not make clear, is that this law came into effect January 1st. A 3 month turn-around between something becoming illegal, and a "settlement" being reached, feels awfully fast to me, and implies that everyone involved was actually trying to follow this new law.

Wouldn't someone truly "trying to follow the new law" have started following the law beginning from the date it's in effect? (Of course mistakes happen, and yes it is probably a sign that they weren't trying to fight it too much, but that's a low bar assuming it is legally clear)

Re: Lambda School agrees to end deceptive educational financing practices

#52

Post by jbigelow76 »

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…

Seems pretty simple...

Student loans become dischargeable > lenders stop lending where tuition cost != market value > exorbitant tuition no longer affordable > universities forced to reprice to new market coniditions > paying back tuition now preferable to 7 year hit on credit for bankruptcy > diplomas for everyone :)

The inability to discharge tuition via bankruptcy has become a moral hazard that society needs to deal with.

Re: Lambda School agrees to end deceptive educational financing practices

#53

Post by sandofsky »

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't operate in California while offering ISAs. After you finally gave up the fight, and agreed to not offer ISAs, they approved you. You said:

> Their approval is a huge testament to our team and our students, as well as an official endorsement of our all-remote, career-focused educational model.

The BPPE does not endorse schools. They simply said you were no longer operating illegally.

Re: Lambda School agrees to end deceptive educational financing practices

#54

Post by anchpop »

michaelbuckbee wrote: post #41
pradn wrote: post #30

Earlier quoted context omitted.

Your bizarre cheeriness in the face of "Agreeing to End Deceptive Educational Financing Practices" is offputting, especially when coupled with the way college financing has led to generational deadweight, anxiety, and hopelessness.

I'd agree with you except that in this case it seems like the "deception" was actually working against Lambda school. Previously -> if you go bankrupt you still owe us. Now -> if you go bankrupt you don't owe us. On the face of it this seems like it would make Lambda school _more_ attractive than less. Note, the clause in question is "qualified educational loan…subject to the limitations on dischargeability contained…

I wonder if the accusation is that they were trying to mislead people into not understanding that bankruptcy is an option, in the hope that they’ll be less likely to default? Still doesn’t really seem that serious to me. Nobody who was under the impression that the loans could not be discharged by bankruptcy will be disappointed to find out that they can.

Re: Lambda School agrees to end deceptive educational financing practices

#55

Post by lupire »

jamiequint wrote: post #45
pradn wrote: post #30

Earlier quoted context omitted.

Your bizarre cheeriness in the face of "Agreeing to End Deceptive Educational Financing Practices" is offputting, especially when coupled with the way college financing has led to generational deadweight, anxiety, and hopelessness.

Your inane judginess is offputting, especially when coupled with how Lambda School is providing attractive alternative options the expensive colleges you're whining about.

I'm surprised that non-anonymous people, who rely on their salesmanship for income, are comfortable publicly embarrassing themselves like this.

Re: Lambda School agrees to end deceptive educational financing practices

#56

Post by anchpop »

pseudalopex wrote: post #43
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?

Saying nothing was an option.

Why would you prefer he say nothing? As long as he’s not misleading people I don’t see what the harm of commenting is.

Re: Lambda School agrees to end deceptive educational financing practices

#57

Post by pseudalopex »

nrmitchi wrote: post #26
pseudalopex wrote: post #23

Earlier quoted context omitted.

Lambda School engaged in deceptive but apparently legal practices. A new law made them illegal. Lambda School continued to engage in the now illegal practices. The state began enforcement proceedings. The parties settled.

Part of my point, that I did not make clear, is that this law came into effect January 1st. A 3 month turn-around between something becoming illegal, and a "settlement" being reached, feels awfully fast to me, and implies that everyone involved was actually trying to follow this new law.

The law passed in August. It took effect in January so businesses could fix violations before. And the practices were always deceptive.

Re: Lambda School agrees to end deceptive educational financing practices

#58

Post by tims33 »

That is a blustery title for what seems like a pretty simple regulatory review. Good job by the state for enforcing laws and Lambda for adapting to new rules. Obviously this CA state agency felt like they needed to pat themselves on the back for doing their job.

Re: Lambda School agrees to end deceptive educational financing practices

#59

Post by Pyramus »

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…

I've done and seen quite some 'spin' on things as an entrepreneur, but this complete lack of humbleness takes the cake for me.

Re: Lambda School agrees to end deceptive educational financing practices

#60

Post by jamiequint »

lupire wrote: post #55
jamiequint wrote: post #45

Earlier quoted context omitted.

Your inane judginess is offputting, especially when coupled with how Lambda School is providing attractive alternative options the expensive colleges you're whining about.

I'm surprised that non-anonymous people, who rely on their salesmanship for income, are comfortable publicly embarrassing themselves like this.

Generally people who build interesting things don't enjoy shitting on other people's attempts to change the world for the better.

I give less than zero shits if people who adopt this type of attitude don't want to work with me. They're not worth working with to begin with.

Go look at the HN launch posts for Dropbox or Coinbase, or the struggles of other companies trying to do something new and make a difference and look at the parade of negative nancies shitting on these companies. It's gross, and they look foolish.

I'm on the side of the builders.

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