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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

#91

Post by dnautics »

jbigelow76 wrote: post #52
renewiltord wrote: post #5

Earlier quoted context omitted.

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 de…

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

Keep in mind that society != government. It's government that is enabling nondischargeability; and it's not in the best interests of the political class to change this situation.

Re: Lambda School agrees to end deceptive educational financing practices

#92

Post by jfim »

lacker wrote: post #80
sandofsky wrote: post #53

Earlier quoted context omitted.

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…

You were caught putting deceptive language in your contracts. Honestly, the California website claims this was "deceptive" but to me that seems like an exaggeration. 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. It's not like California makes it extremely transparent and clear what the rules…

> 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.

Re: Lambda School agrees to end deceptive educational financing practices

#93

Post by foerbert »

davidw wrote: post #37
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.

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?

This response just appears disconnected from reality. It's like watching somebody talk about how getting punched in the face was a wonderful and purely positive experience. It's just baffling.

There are options other than being weirdly positive and ranting. They could not say anything at all. They could give one of several varieties of mea culpa. They could simply state their intentions going forward.

Re: Lambda School agrees to end deceptive educational financing practices

#94

Post by [deleted] »

jfrunyon wrote: post #79
renewiltord wrote: post #5

Earlier quoted context omitted.

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…

Except that declaring bankruptcy has actual consequences for people with no assets.

[deleted]

Re: Lambda School agrees to end deceptive educational financing practices

#95

Post by [deleted] »

aerosmile wrote: post #69
lupire wrote: post #55

Earlier quoted context omitted.

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

I am surprised by your comment. Posting a single sentence without any context other than what appears to be nothing more than a personal insult (how do you know about Jamie's sources of income?) is unusually rude for this community.

[deleted]

Re: Lambda School agrees to end deceptive educational financing practices

#96

Post by kethinov »

jfim wrote: post #92
lacker wrote: post #80

Earlier quoted context omitted.

You were caught putting deceptive language in your contracts. Honestly, the California website claims this was "deceptive" but to me that seems like an exaggeration. 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. It's not like California makes it extremely transparent and clear what the rules…

> 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.

Re: Lambda School agrees to end deceptive educational financing practices

#97

Post by aerosmile »

minimaxir wrote: post #76
aerosmile wrote: post #69

Earlier quoted context omitted.

I am surprised by your comment. Posting a single sentence without any context other than what appears to be nothing more than a personal insult (how do you know about Jamie's sources of income?) is unusually rude for this community.

Their profile says "Now: Investing/Consulting" which implies salesmanship for income.

Ok, they didn't Google their name, but instead clicked on their profile and researched them "only within the HN web domain." Still feels personal and unnecessary.

Edit: nevermind, they did Google him.

Re: Lambda School agrees to end deceptive educational financing practices

#98

Post by nicklecompte »

anchpop wrote: post #54
michaelbuckbee wrote: post #41

Earlier quoted context omitted.

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.

> they were trying to mislead people into not understanding that bankruptcy is an option

It’s exactly this. Lambda School customers tend to be young and financially ignorant, with very few resources. If a graduate is in a position where, say, they can’t find a software job, they could be functionally bankrupt, and their dwindling income/savings will still be going towards outstanding Lambda School payments.

From this perspective, it’s extremely shitty for LS to deceive students that they would have to make the payments, with no legal options, even if they were stressed about rent and groceries.

Re: Lambda School agrees to end deceptive educational financing practices

#99

Post by lacker »

jfim wrote: post #92
lacker wrote: post #80

Earlier quoted context omitted.

You were caught putting deceptive language in your contracts. Honestly, the California website claims this was "deceptive" but to me that seems like an exaggeration. 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. It's not like California makes it extremely transparent and clear what the rules…

> 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 important, I just mean that the law isn't obvious here, so we shouldn't jump from "Lambda made a false statement about the California law" to "Lambda is maliciously trying to mislead students".

Re: Lambda School agrees to end deceptive educational financing practices

#100

Post by [deleted] »

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…

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