16 ms·

Lambda School fined $75k by CA for operating without state approval [pdf]

338 points by lanrh1836 7y ago

minimaxir 7y ago
Per the dates the fine was issued in April at the latest; why is this surfacing now?
- floatingatoll 7y ago
  The judgement from April was not posted on HN at the time, and as a (YC S17) it's relevant to HN. It also appears, from a brief search, that there are active social media conversations elsewhere than HN that have caused attention to be paid to Lambda School this week.
- deleted 7y ago
  [deleted]
viggity 7y ago
honestly, fuck california.
- deleted 7y ago
  [deleted]
- tw1010 7y ago
  The law is the law. You should be saying fuck the law, not fuck the enforcement. And it's the people who voted in the law, so it's the people of california you should be saying fuck to.
- jedberg 7y ago
  For what, trying to protect people from being swindled by people claiming to give an education but not? I for one am happy that my state requires people claiming to run schools to go through some sort of vetting process.
  - adnzzzzZ 7y ago
    The vetting process and requirements for compliance likely makes it harder for schools who have alternative methods of teaching to be able to experiment and find better solutions to the problem. This pushes innovation in this field out of your state, which you may be okay with as long as people aren't getting swindled. But there's always a cost to these things.
    - enraged_camel 7y ago
      I don't buy these "regulation kills innovation" type arguments. While regulation does put up barriers to entry, it also ensures a baseline level of quality and prevents abuse of the system. I mean there's a reason we don't allow everyone to perform surgery or fly commercial aircraft.
      - wutbrodo 7y ago
        What does manually ensuring a baseline level of quality have to do with innovation? Your comment makes a case for why regulation exists, not a case against the claim that it harms innovation.
        enraged_camel 7y ago
        The parent poster offered a false dichotomy where you have regulation on one end and innovation on the other. The reason this dichotomy is false is because it assumes that innovation is only introduced by small and new players in a market. My objection is that not only is that not true (some of the largest companies in any regulated market can also be the most significant innovators in that market), it is also the case that small and new players are often in it to cheat and fleece customers, and regulation is a good defense against them.
    - EpicEng 7y ago
      >...likely... Are you familiar with the regs? Your conclusion seems to be based on no actual knowledge, just assumptions.
- omarhaneef 7y ago
  I think you're annoyed because you like lambda school, the service it offers, the value it provides customers and so on. On the other hand you see this mighty government unilaterally fining them for providing this service. However, the problem is the law has to work in the abstract for every case and not just for this benign case. If they don't ask them to work with the law now, what happens when a terrible institution that doesn't provide value and really takes advantage of its customers opens up? Then they can say, hey you didn't fine lambda, why are you fining us? And, worst of all, they would be right. In the long run, this ought to provide a barrier to entry for sub-par institutions. (Btw, I haven't gone through lambda or any competitor, and I don't have an opinion as to the quality of the programs).
baggy_trough 7y ago
Nuts that the state has the right to block this kind of thing. What foolishness is that?
- joelhaasnoot 7y ago
  Trump University anyone? I mean, the space is ripe for misleading (vulnerable) people.
  - anonymous5133 7y ago
    As far as i know TU wasn't a scam. It was simply a real estate focused program.
    - joelhaasnoot 7y ago
      It was settled for $25 million, so we'll never really know: https://en.wikipedia.org/wiki/Trump_University#Allegations_of_impropriety_and_lawsuits https://en.wikipedia.org/wiki/Trump_University#Allegations_o...
      - sfthrower89 7y ago
        All we'll really know is that Trump bragged a great deal about how good of a deal he got on the settlement.
- _Microft 7y ago
  Basically that's Quality Assurance. While Lambda School might be doing good by having the right incentives for all involved parties, a lot of money could be made by tricking people to enroll into questionable schools. So it's for the public good to regulate that market. The question is rather why Lamda School didn't get themselves approved?
  - moate 7y ago
    Answered elsewhere in thread: Their legal counsel said they didn't need to. The lawyer was wrong, and they now have new legal counsel. Seems like a legit oops which they're since fixed.
tibbon 7y ago
Doesn't shock me one bit. I worked for General Assembly ~5 years ago, and they were really serious about getting and staying on top of all the state guidelines. I got the sense that we were the only school taking that seriously at the time. The only thing that shocks me is that we haven't seen such earlier. I don't have a strong opinion about if such things should be regulated or not, but I do know that there's a lot of people who have just slapped together programs to ride a money wave, and offer relatively little in exchange and it's hard to vet the places by yourself.
- napoleond 7y ago
  > I do know that there's a lot of people who have just slapped together programs to ride a money wave, and offer relatively little in exchange It's not clear if you're intending to criticize Lambda School in particular here, but given the context that's how it comes across. If that wasn't your intention, it might be worth clarifying your comment; otherwise it might be worth providing some supporting evidence. I'm not associated with Lambda School, but am a fan precisely because they have always struck me as a really sincere organization that works hard to maximize value for their students.
  - tibbon 7y ago
    This definitely isn't a slap at Lambda School. From what I've heard they are fine, and their response on this thread shows they care and are working on things. At this point I'm far less familiar with the market than I was several years ago. I remember dozens of places popping up nearly overnight and hearing horror stories from students - Lambda wasn't one of those.
- mieseratte 7y ago
  I'm not quite sure where I stand on the regulation vs. lack thereof when it comes to these types of operations either, but between working in a hiring capacity, serving as a mock-interviewer, being courted as a potential instructor, and being friends with both instructors and unsuccessful graduates (across ~5 years) from my local, now defunct code camp - there are a lot of folks who go into these programs, often going into non-trivial debt, and coming out with nothing to show for it. I will never forget watching a grown man cry in a mock interview because he could not solve FizzBuzz. I made sure they understood the relevant operators, the problem, inputs and expected output, gave ample time, kept things very casual and relaxed, and told them to ask any questions they needed. This was practice, after all. I suppose I would cry too, if I wasted months and ~20,000, likely banking on a great new life as a programmer. At the same time I've worked with great entry-level developers who used the code camps to jump from "bad" positions, e.g. young dead-ended professionals, folks with complimentary degrees but no job prospects in that industry, etc. The common thread with these folks is either prior background programming, a personal support network of programmers, or both. What kind of regulation would help for this? Mandated entrance exams with a hard-cutoff?
jedberg 7y ago
Their only penalty was $75,000? Sounds like "ask for forgiveness not permission" worked out pretty well for them here. I assume they also have to come into compliance to avoid further fines, but given that they provide a legit educational service, that shouldn't be too hard for them.
- sp332 7y ago
  This is a first offense. As mentioned in the black box near the end of the letter, things can escalate quickly.
  - jedberg 7y ago
    Their founder mentioned elsewhere in this thread that they are working with the state to get into compliance as soon as they got this notice. Looks like they weren't even trying to skirt the law, they just got bad advice.
- austenallred 7y ago
  To be clear, we were never trying to ask for forgiveness, we were told we didn’t need to ask for permission :) We’re lucky to be big and VC-backed and growing fast. $75k would be near deadly to a lot of smaller schools, so I’m sure the BPPE sized the fees accordingly.
  - jedberg 7y ago
    I replied before you started commenting and before I had the whole story. :) I wrongly assumed you were acting like most other startups and just figured "we'll sort it out later". My apologies for assuming that!
    - austenallred 7y ago
      No worries at all! Reasonable assumption
austenallred 7y ago
It’s true. Our counsel informed us that we didn’t need to register. Counsel was wrong. Now we have new counsel :) We’ve submitted all the paperwork and have worked closely with California. This all happened a long time ago. I’m not sure what the right level of regulation is (it’s hard taking care of 50 states at once - one state registration was 2,277 pages and weighed 25 pounds https://twitter.com/austen/status/1153450365712388096?s=21 https://twitter.com/austen/status/1153450365712388096?s=21), but it’s reasonable that it would be regulated somehow.
- algodaily 7y ago
  Glad you got it sorted out!
- moate 7y ago
  Glad you got that sorted out. Lambda school does seem to be "one of the good guys" out there in this market, so I'm glad to see you're taking the steps to keep that reputation.
  - austenallred 7y ago
    We’re trying
- TimTheTinker 7y ago
  Not directing this at you, but to all - this is a concrete example of why you shouldn’t blindly trust legal (or medical, or spiritual) advice. Ask questions, make sure you understand, and think critically. No one is infallible.
  - austenallred 7y ago
    Correct. Live and learn.
  - Chris2048 7y ago
    I thought lawyers are liable for bad advice?
deleted 7y ago
[deleted]
dollar 7y ago
Reason #91836218 not to have nexus in California.
- noodlesUK 7y ago
  I’m not sure that this has anything to do with where the organisation is registered, rather where services are provided. CA has particularly strict education regulations from what I understand (I’m not an expert at all, but I was homeschooled, and that’s certainly more heavily regulated in CA than most states). I’d be curious where Lambda has to register, and how all of this is managed from a compliance perspective, especially as they expand into international markets.
amerf1 7y ago
These things happen when you're just getting starting its normal we live and learn. Just hoping they start a slightly more flexible cohort for people who are working and looking for the next promotion
- austenallred 7y ago
  What would we need to change about our part-time classes to make it accessible to you?
  - amerf1 7y ago
    Having shorter weekday hours and longer weekend hours would make it perfect. I was in the process of registering for the March 2019 data science cohort, however I dropped it as I did not want to take someone else's spot. Could not commit to 3 hours a day (on a week day)
    - austenallred 7y ago
      Interesting. So could you give me an example schedule that gets to at least 20 hours/week?
      - amerf1 7y ago
        Monday to Thursday 1 hour each Friday off Saturday 8 hours Sunday 8 hours That’s one example I could think of. The day off could also move around so Monday could be off
        austenallred 7y ago
        Hmm, very interesting
  - tvanantwerp 7y ago
    Something I noticed for part-time classes is that they are mostly 6pm-9pm PST. That becomes 9pm-12am on the East Coast, where I live. That's not feasible if you're also working a 9-5 job; it's signing up to be sleep deprived for 18 months. The science on the negative health effects of chronic sleep deprivation being extremely clear, I'd never sign up for that.
prennert 7y ago
Learned something today. I thought lambdas operate without state.
- deleted 7y ago
  [deleted]
- vga805 7y ago
  Thank you for the reminder of why I spend so much time browsing HN comments.
- inopinatus 7y ago
  The real danger here is closure.
duxup 7y ago
This seems like a reasonable agreement. Pay a fine (they can afford it I think), get in compliance, everyone moves on.
Someone1234 7y ago
After reading this thread and considering it, the regulations seem fine, but lack of consistency between states seems to be a large pain-pont. I realize California isn't just "any" state but needing to seek unique approval from up to all 50 states just to run an online school seems like a really high (and expensive) bar. It would be nice if more states cooperated on things like this. Then you seek approval from the collective, rather than at an individual level.
- austenallred 7y ago
  That is accurate
- Kalium 7y ago
  California had a rough spot a few decades back with a lot of scammy junk-tier "trade schools". This led to the creation of fairly strong regulatory system in the area.
- cortesoft 7y ago
  It looks like the regulation only applies if you have a physical building in California. Since Lambda school is based in California, they have to abide by the law. You don't need all 50 states approval to run an online school, but you will need the approval of the state that you are actually in.
  - xmprt 7y ago
    Until another state passes a law saying you need to follow their regulations regardless of whether you have a building in the state as long as you're operating there.
- TACIXAT 7y ago
  It's the same with money service businesses. There are federal regs, then each state has their own. It sets a huge barrier to entry.
- mychael 7y ago
  The "lack of consistency" between state regulations is a feature, not a bug. States are Laboratories of democracy.
auvi 7y ago
do MOOCs or any online course go through similar regulation?
- austenallred 7y ago
  In theory if they charge for the course they do.
  - CesareBorgia 7y ago
    If the course is less than $2k or $3k (can't remember the exact figure), the regulations don't apply. Also, it depends on who the payer is. If the purchasers are solely companies (think corporate training), this regulation doesn't apply.
    - austenallred 7y ago
      Yeah it's $2k
CesareBorgia 7y ago
This isn't the first time that the CA regulator (BPPE) has surprised code schools with cease-and-desist letters :) That said, we (App Academy) found that the BPPE was a mostly accommodating regulator that worked with us to come into compliance. We did face a couple challenges that will likely still exist today: 1) BPPE won't give approval to operate until the whole application process is completed. This means that Lambda School is likely operating without approval and will continue to do so for 6-12 months at a minimum. Contracts are unenforceable during this period, the school could be forced to shut down CA operations overnight, etc. 2) BPPE doesn't have a formal policy for Income Share Agreements (ISAs). We were able to get our ISA approved in 2015, but it took some doing and was not nearly as straightforward as getting a normal tuition contract approved. Several other ISA programs that applied a year or two after us were not approved. More info: https://venturebeat.com/2014/01/30/california-bootcamp-will-work-with-regulator-whatever-the-cost-its-worth-it-to-satisfy-the-state-interview/ https://venturebeat.com/2014/01/30/california-bootcamp-will-...
- austenallred 7y ago
  I can't say much publicly, except to say that nearly everything you just said is wrong.
  - CesareBorgia 7y ago
    Totally possible that things have changed in the intervening ~5 years, but that was our experience at the time.
    - austenallred 7y ago
      Seems likely. I think they have wrapped their mind around code bootcamps a tiny bit now. They still haven't fully wrapped their minds around the ISA yet, but that's doable too.
  - deleted 7y ago
    [deleted]
rhacker 7y ago
What is the purpose of having a law requiring approval for post-secondary education? Isn't this a trade school? Why in the world does a trade school need this kind of regulation. It just seems like most of our laws are passed in secret you don't know you violated anything until you get hit.
- throwawayjava 7y ago
  > What is the purpose of having a law requiring approval for post-secondary education? There are many. Perhaps the most compelling is a long history of scams. California's regulations might be arduous, but they didn't come out of nowhere. Another reason is that the customers almost by definition doesn't know how to asses quality. > It just seems like most of our laws are passed in secret. This law wasn't passed in secret.
- sfthrower89 7y ago
  Two words: Trump University.
chaoxu 7y ago
So Lambda School is considered as an educational institution. Does this mean any foreigner enrolled in it probably need a student visa? Can non-US residents take online courses while in the US without a student visa?
- austenallred 7y ago
  It's an entirely online school, and we're not Title IV accredited, so we have no authority over visas. However, we can only offer the $0 upfront option to permanent residents of the US and EU right now. Hopefully soon other countries.
yalogin 7y ago
Can someone tell me what a Lambda school is? From the comments here it appears its a specific class of school. From their site it just looks like a regular online learning company.
- shuckles 7y ago
  Online learning company with a founder good at growth hacking attention on Twitter, as well as one of the more outspoken advocates for Income Share Agreements in media.
- chx 7y ago
  > From the comments here it appears its a specific class of school. From their site it just looks like a regular online learning company. It is not a class of school, it is indeed a company. A scam/cult masquerading as a startup. It's hyped, it's batshit insane. A thread from yesterday https://twitter.com/KeziyahL/status/1155154616281178114 https://twitter.com/KeziyahL/status/1155154616281178114 but of course there is more. To me, it was obvious there is something wrong because PaulG often raved about it and nothing good comes out of that. You can't growth hack education. Humans don't work like that. I started a (very small, very unprofitable) school in a far away country and also happen to have a teacher's degree and oh boy. As for scam, just look at their website. > "Pay $0 tuition until you land a high-paying job Lambda covers your tuition costs until you're making at least $50,000 a year. " How is $50 000 a high paying job? According to the SSA, the average wage in 2017 was $48,251.57. Also, the 17% is calculated from before tax but paid after tax. So if you earn 50K, take home 40K then Lambda doesn't take 6800, no they will take 8500. > "You can choose to pay $20k upfront for Lambda tuition ... You'll never pay more than $30k ..." Wait, you are charging 50% interest? Possibly over two years?
  - austenallred 7y ago
    > To me, it was obvious there is something wrong because PaulG often raved about it and nothing good comes out of that. Just pointing out how funny it is for someone to say that nothing good comes from PG... on HackerNews
AJRF 7y ago
https://twitter.com/Austen/status/1153451563664343040 https://twitter.com/Austen/status/1153451563664343040
- austenallred 7y ago
  This was for a different state! And it was a full-time contract lawyer and my assistant (pictured); our first legal hire joins later next month.
randyrand 7y ago
Looking at the text of the fine, you can't charge money to teach people things ("offer education" in their parlence) in a physical location without state approval. Could that be any more broad? Education is often just verbal and written communication between people. Seems like a first amendment violation.
- gruez 7y ago
  >you can't charge money to teach people things [...] >Seems like a first amendment violation. The key phrase here is charging money. Commercial speech has always been more strictly regulated than other forms of speech.
  - nokcha 7y ago
    "Commercial speech" refers to advertising, or more precisely, speech that "proposes a commercial transaction". It does not refer to speech that is charged for. Newspapers and books are fully protected by the First Amendment even though people pay for them.
    - charrondev 7y ago
      Isn’t there specific wording for the press? > Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances. It clearly distinguishes the press as different from speech, but teaching someone certainly seems like it would fall under normal speech.
    - thaumasiotes 7y ago
      > "Commercial speech" refers to advertising, or more precisely, speech that "proposes a commercial transaction". It does not refer to speech that is charged for. Unfortunately, there is a received "professional speech" semi-exception to the First Amendment, explaining things like how there can be laws against charging money for legal advice (pure speech) without a state license. I assume that's what California is thinking here.
pl0x 7y ago
How is Lamda School any different from Thinkful who has been doing this for over a decade? I have a few friends interested in online bootcamps?
- austenallred 7y ago
  Different curriculum, different instructional design, different length, different approach to hiring partners
ddebernardy 7y ago
It's not everyday where you see a typo on a numeric value in a legal document: https://i.imgur.com/CKt5ZGT.png https://i.imgur.com/CKt5ZGT.png (notice the $75,0000.00 - in bold, no less)
- camhart 7y ago
  Found this too... quite funny.
mtrombetti 7y ago
Why does Lamda School need to be registered in California and not somewhere else?
- passivepinetree 7y ago
  Reading the currently top-rated comment from the co-founder of Lambda School, it looks like they must register in all states: https://news.ycombinator.com/item?id=20555707 https://news.ycombinator.com/item?id=20555707
westonplatter0 7y ago
@austenallred - sorry about the hiccup. Sucks to get caught on the wrong side of regulations. Thanks for being so incredibly open about it. Cheering for LS.
wishinghand 7y ago
Something very similar happened to Origin Code Academy in San Diego. I believe their situation is that one of the state bodies told them they would be exempt from a certain type of tax. Once they registered and were approved, they were then asked to pay their back taxes which they of course didn't have saved up.
hiei 7y ago
Lambda employees always do PR damage on HN. Had commented about a poor experience of mine and was told to reach out via email, no response ever. They're all talk.
- austenallred 7y ago
  When did this happen? I can look into it
  - hiei 7y ago
    https://news.ycombinator.com/item?id=19375303 https://news.ycombinator.com/item?id=19375303
sethammons 7y ago
I decided to parse what was given to them. Slightly restructured: > A person shall not open, conduct, or do business as a private postsecondary educational institution (a private entity with a physical presence in this state that offers – advertise, publicize, solicit, or recruit – postsecondary education to the public for an institutional charge) in this state without obtaining an approval to operate under this chapter. The institution must be approved to operate, which means approved to establish, keep, or maintain any facility or location in this state where, or from which, or through which, postsecondary education programs are provided. I think the key part is the determination of their location. Their California headquarters counts as a facility through which programs are provided. The fact that the classes are fully online is unrelated. They would have to argue that their headquarters don't have anything to do with providing postsecondary education programs.
- austenallred 7y ago
  Our instructors aren't in California, though, which is why our counsel thought we were OK.
macinjosh 7y ago
Why does anyone need permission from The State to teach? Seems like a violation of the first amendment.
- bontaq 7y ago
  Wait until you hear that you can't lie about being a doctor. It's beneficial for society to make sure entities representing that they are something, actually are that something.
macinjosh 7y ago
Feel sorry for all the suckers who pay these Lambda folks tens of thousands of dollars to learn something that can easily be self taught through the plethora of blogs, videos, e-books, etc. available online.
RA_Fisher 7y ago
Folks get jealous of success.
chasontherobot 7y ago
And this is why we need more regulations on the "Bootcamp" industry: https://twitter.com/KeziyahL/status/1155154616281178114 https://twitter.com/KeziyahL/status/1155154616281178114
- kevintb 7y ago
  This needs to be higher up. HN reserves skepticism for so many bootcamps but throw all their judgement out the window when it comes with Lambda School.
- deleted 7y ago
  [deleted]
29_29 7y ago
Many states are light touch. California is a heavy touch state. Our hands are everywhere and all over you.
siruncledrew 7y ago
Everyone complaining about regulation should take a read through Common Law on Wikipedia and understand how U.S. regulation ends up more additive than subtractive in many cases over the years. The reason we have inordinate amounts of regulations to fill out paperwork for is because “reason” doesn’t work the same way in law as it does in practicality. What’s absurdly stupid in layman’s situations is but a part of the game of legal chess in court. We could have a law that says “Use common sense and don’t be an idiot”, which makes perfect sense in theory, and without very specific precedents will debated to hell in court with how common law cases work. We end up with a lot of nonsense clauses and rules and requirements due to this, but it also is how chaos is supposed to be kept in check from erupting at the seams when people use lack of specific regulation as an incentive to find ways to screw other people over.
tomohawk 7y ago
Our universities regularly award high priced degrees that lack the important quality of employability. Unsophisticated (18 yo) purchasers of these degrees go deeply into debt, lured by false promises. So much for regulation.

338 points by lanrh1836 7y ago

minimaxir 7y ago

Per the dates the fine was issued in April at the latest; why is this surfacing now?

floatingatoll 7y ago
The judgement from April was not posted on HN at the time, and as a (YC S17) it's relevant to HN. It also appears, from a brief search, that there are active social media conversations elsewhere than HN that have caused attention to be paid to Lambda School this week.
deleted 7y ago
[deleted]

viggity 7y ago

honestly, fuck california.

deleted 7y ago
[deleted]
tw1010 7y ago
The law is the law. You should be saying fuck the law, not fuck the enforcement. And it's the people who voted in the law, so it's the people of california you should be saying fuck to.
jedberg 7y ago
For what, trying to protect people from being swindled by people claiming to give an education but not? I for one am happy that my state requires people claiming to run schools to go through some sort of vetting process.
- adnzzzzZ 7y ago
  The vetting process and requirements for compliance likely makes it harder for schools who have alternative methods of teaching to be able to experiment and find better solutions to the problem. This pushes innovation in this field out of your state, which you may be okay with as long as people aren't getting swindled. But there's always a cost to these things.
  - enraged_camel 7y ago
    I don't buy these "regulation kills innovation" type arguments. While regulation does put up barriers to entry, it also ensures a baseline level of quality and prevents abuse of the system. I mean there's a reason we don't allow everyone to perform surgery or fly commercial aircraft.
    - wutbrodo 7y ago
      What does manually ensuring a baseline level of quality have to do with innovation? Your comment makes a case for why regulation exists, not a case against the claim that it harms innovation.
      - enraged_camel 7y ago
        The parent poster offered a false dichotomy where you have regulation on one end and innovation on the other. The reason this dichotomy is false is because it assumes that innovation is only introduced by small and new players in a market. My objection is that not only is that not true (some of the largest companies in any regulated market can also be the most significant innovators in that market), it is also the case that small and new players are often in it to cheat and fleece customers, and regulation is a good defense against them.
  - EpicEng 7y ago
    >...likely... Are you familiar with the regs? Your conclusion seems to be based on no actual knowledge, just assumptions.
omarhaneef 7y ago
I think you're annoyed because you like lambda school, the service it offers, the value it provides customers and so on. On the other hand you see this mighty government unilaterally fining them for providing this service. However, the problem is the law has to work in the abstract for every case and not just for this benign case. If they don't ask them to work with the law now, what happens when a terrible institution that doesn't provide value and really takes advantage of its customers opens up? Then they can say, hey you didn't fine lambda, why are you fining us? And, worst of all, they would be right. In the long run, this ought to provide a barrier to entry for sub-par institutions. (Btw, I haven't gone through lambda or any competitor, and I don't have an opinion as to the quality of the programs).

baggy_trough 7y ago

Nuts that the state has the right to block this kind of thing. What foolishness is that?

joelhaasnoot 7y ago
Trump University anyone? I mean, the space is ripe for misleading (vulnerable) people.
- anonymous5133 7y ago
  As far as i know TU wasn't a scam. It was simply a real estate focused program.
  - joelhaasnoot 7y ago
    It was settled for $25 million, so we'll never really know: https://en.wikipedia.org/wiki/Trump_University#Allegations_of_impropriety_and_lawsuits https://en.wikipedia.org/wiki/Trump_University#Allegations_o...
    - sfthrower89 7y ago
      All we'll really know is that Trump bragged a great deal about how good of a deal he got on the settlement.
_Microft 7y ago
Basically that's Quality Assurance. While Lambda School might be doing good by having the right incentives for all involved parties, a lot of money could be made by tricking people to enroll into questionable schools. So it's for the public good to regulate that market. The question is rather why Lamda School didn't get themselves approved?
- moate 7y ago
  Answered elsewhere in thread: Their legal counsel said they didn't need to. The lawyer was wrong, and they now have new legal counsel. Seems like a legit oops which they're since fixed.

tibbon 7y ago

Doesn't shock me one bit. I worked for General Assembly ~5 years ago, and they were really serious about getting and staying on top of all the state guidelines. I got the sense that we were the only school taking that seriously at the time. The only thing that shocks me is that we haven't seen such earlier. I don't have a strong opinion about if such things should be regulated or not, but I do know that there's a lot of people who have just slapped together programs to ride a money wave, and offer relatively little in exchange and it's hard to vet the places by yourself.

napoleond 7y ago
> I do know that there's a lot of people who have just slapped together programs to ride a money wave, and offer relatively little in exchange It's not clear if you're intending to criticize Lambda School in particular here, but given the context that's how it comes across. If that wasn't your intention, it might be worth clarifying your comment; otherwise it might be worth providing some supporting evidence. I'm not associated with Lambda School, but am a fan precisely because they have always struck me as a really sincere organization that works hard to maximize value for their students.
- tibbon 7y ago
  This definitely isn't a slap at Lambda School. From what I've heard they are fine, and their response on this thread shows they care and are working on things. At this point I'm far less familiar with the market than I was several years ago. I remember dozens of places popping up nearly overnight and hearing horror stories from students - Lambda wasn't one of those.
mieseratte 7y ago
I'm not quite sure where I stand on the regulation vs. lack thereof when it comes to these types of operations either, but between working in a hiring capacity, serving as a mock-interviewer, being courted as a potential instructor, and being friends with both instructors and unsuccessful graduates (across ~5 years) from my local, now defunct code camp - there are a lot of folks who go into these programs, often going into non-trivial debt, and coming out with nothing to show for it. I will never forget watching a grown man cry in a mock interview because he could not solve FizzBuzz. I made sure they understood the relevant operators, the problem, inputs and expected output, gave ample time, kept things very casual and relaxed, and told them to ask any questions they needed. This was practice, after all. I suppose I would cry too, if I wasted months and ~20,000, likely banking on a great new life as a programmer. At the same time I've worked with great entry-level developers who used the code camps to jump from "bad" positions, e.g. young dead-ended professionals, folks with complimentary degrees but no job prospects in that industry, etc. The common thread with these folks is either prior background programming, a personal support network of programmers, or both. What kind of regulation would help for this? Mandated entrance exams with a hard-cutoff?

jedberg 7y ago

Their only penalty was $75,000? Sounds like "ask for forgiveness not permission" worked out pretty well for them here. I assume they also have to come into compliance to avoid further fines, but given that they provide a legit educational service, that shouldn't be too hard for them.

sp332 7y ago
This is a first offense. As mentioned in the black box near the end of the letter, things can escalate quickly.
- jedberg 7y ago
  Their founder mentioned elsewhere in this thread that they are working with the state to get into compliance as soon as they got this notice. Looks like they weren't even trying to skirt the law, they just got bad advice.
austenallred 7y ago
To be clear, we were never trying to ask for forgiveness, we were told we didn’t need to ask for permission :) We’re lucky to be big and VC-backed and growing fast. $75k would be near deadly to a lot of smaller schools, so I’m sure the BPPE sized the fees accordingly.
- jedberg 7y ago
  I replied before you started commenting and before I had the whole story. :) I wrongly assumed you were acting like most other startups and just figured "we'll sort it out later". My apologies for assuming that!
  - austenallred 7y ago
    No worries at all! Reasonable assumption

austenallred 7y ago

It’s true. Our counsel informed us that we didn’t need to register. Counsel was wrong. Now we have new counsel :) We’ve submitted all the paperwork and have worked closely with California. This all happened a long time ago. I’m not sure what the right level of regulation is (it’s hard taking care of 50 states at once - one state registration was 2,277 pages and weighed 25 pounds https://twitter.com/austen/status/1153450365712388096?s=21 https://twitter.com/austen/status/1153450365712388096?s=21), but it’s reasonable that it would be regulated somehow.

algodaily 7y ago
Glad you got it sorted out!
moate 7y ago
Glad you got that sorted out. Lambda school does seem to be "one of the good guys" out there in this market, so I'm glad to see you're taking the steps to keep that reputation.
- austenallred 7y ago
  We’re trying
TimTheTinker 7y ago
Not directing this at you, but to all - this is a concrete example of why you shouldn’t blindly trust legal (or medical, or spiritual) advice. Ask questions, make sure you understand, and think critically. No one is infallible.
- austenallred 7y ago
  Correct. Live and learn.
- Chris2048 7y ago
  I thought lawyers are liable for bad advice?

deleted 7y ago

[deleted]

dollar 7y ago

Reason #91836218 not to have nexus in California.

noodlesUK 7y ago
I’m not sure that this has anything to do with where the organisation is registered, rather where services are provided. CA has particularly strict education regulations from what I understand (I’m not an expert at all, but I was homeschooled, and that’s certainly more heavily regulated in CA than most states). I’d be curious where Lambda has to register, and how all of this is managed from a compliance perspective, especially as they expand into international markets.

amerf1 7y ago

These things happen when you're just getting starting its normal we live and learn. Just hoping they start a slightly more flexible cohort for people who are working and looking for the next promotion

austenallred 7y ago
What would we need to change about our part-time classes to make it accessible to you?
- amerf1 7y ago
  Having shorter weekday hours and longer weekend hours would make it perfect. I was in the process of registering for the March 2019 data science cohort, however I dropped it as I did not want to take someone else's spot. Could not commit to 3 hours a day (on a week day)
  - austenallred 7y ago
    Interesting. So could you give me an example schedule that gets to at least 20 hours/week?
    - amerf1 7y ago
      Monday to Thursday 1 hour each Friday off Saturday 8 hours Sunday 8 hours That’s one example I could think of. The day off could also move around so Monday could be off
      - austenallred 7y ago
        Hmm, very interesting
- tvanantwerp 7y ago
  Something I noticed for part-time classes is that they are mostly 6pm-9pm PST. That becomes 9pm-12am on the East Coast, where I live. That's not feasible if you're also working a 9-5 job; it's signing up to be sleep deprived for 18 months. The science on the negative health effects of chronic sleep deprivation being extremely clear, I'd never sign up for that.

prennert 7y ago

Learned something today. I thought lambdas operate without state.

deleted 7y ago
[deleted]
vga805 7y ago
Thank you for the reminder of why I spend so much time browsing HN comments.
inopinatus 7y ago
The real danger here is closure.

duxup 7y ago

This seems like a reasonable agreement. Pay a fine (they can afford it I think), get in compliance, everyone moves on.

Someone1234 7y ago

After reading this thread and considering it, the regulations seem fine, but lack of consistency between states seems to be a large pain-pont. I realize California isn't just "any" state but needing to seek unique approval from up to all 50 states just to run an online school seems like a really high (and expensive) bar. It would be nice if more states cooperated on things like this. Then you seek approval from the collective, rather than at an individual level.

austenallred 7y ago
That is accurate
Kalium 7y ago
California had a rough spot a few decades back with a lot of scammy junk-tier "trade schools". This led to the creation of fairly strong regulatory system in the area.
cortesoft 7y ago
It looks like the regulation only applies if you have a physical building in California. Since Lambda school is based in California, they have to abide by the law. You don't need all 50 states approval to run an online school, but you will need the approval of the state that you are actually in.
- xmprt 7y ago
  Until another state passes a law saying you need to follow their regulations regardless of whether you have a building in the state as long as you're operating there.
TACIXAT 7y ago
It's the same with money service businesses. There are federal regs, then each state has their own. It sets a huge barrier to entry.
mychael 7y ago
The "lack of consistency" between state regulations is a feature, not a bug. States are Laboratories of democracy.

auvi 7y ago

do MOOCs or any online course go through similar regulation?

austenallred 7y ago
In theory if they charge for the course they do.
- CesareBorgia 7y ago
  If the course is less than $2k or $3k (can't remember the exact figure), the regulations don't apply. Also, it depends on who the payer is. If the purchasers are solely companies (think corporate training), this regulation doesn't apply.
  - austenallred 7y ago
    Yeah it's $2k

CesareBorgia 7y ago

This isn't the first time that the CA regulator (BPPE) has surprised code schools with cease-and-desist letters :) That said, we (App Academy) found that the BPPE was a mostly accommodating regulator that worked with us to come into compliance. We did face a couple challenges that will likely still exist today: 1) BPPE won't give approval to operate until the whole application process is completed. This means that Lambda School is likely operating without approval and will continue to do so for 6-12 months at a minimum. Contracts are unenforceable during this period, the school could be forced to shut down CA operations overnight, etc. 2) BPPE doesn't have a formal policy for Income Share Agreements (ISAs). We were able to get our ISA approved in 2015, but it took some doing and was not nearly as straightforward as getting a normal tuition contract approved. Several other ISA programs that applied a year or two after us were not approved. More info: https://venturebeat.com/2014/01/30/california-bootcamp-will-work-with-regulator-whatever-the-cost-its-worth-it-to-satisfy-the-state-interview/ https://venturebeat.com/2014/01/30/california-bootcamp-will-...

austenallred 7y ago
I can't say much publicly, except to say that nearly everything you just said is wrong.
- CesareBorgia 7y ago
  Totally possible that things have changed in the intervening ~5 years, but that was our experience at the time.
  - austenallred 7y ago
    Seems likely. I think they have wrapped their mind around code bootcamps a tiny bit now. They still haven't fully wrapped their minds around the ISA yet, but that's doable too.
- deleted 7y ago
  [deleted]

rhacker 7y ago

What is the purpose of having a law requiring approval for post-secondary education? Isn't this a trade school? Why in the world does a trade school need this kind of regulation. It just seems like most of our laws are passed in secret you don't know you violated anything until you get hit.

throwawayjava 7y ago
> What is the purpose of having a law requiring approval for post-secondary education? There are many. Perhaps the most compelling is a long history of scams. California's regulations might be arduous, but they didn't come out of nowhere. Another reason is that the customers almost by definition doesn't know how to asses quality. > It just seems like most of our laws are passed in secret. This law wasn't passed in secret.
sfthrower89 7y ago
Two words: Trump University.

chaoxu 7y ago

So Lambda School is considered as an educational institution. Does this mean any foreigner enrolled in it probably need a student visa? Can non-US residents take online courses while in the US without a student visa?

austenallred 7y ago
It's an entirely online school, and we're not Title IV accredited, so we have no authority over visas. However, we can only offer the $0 upfront option to permanent residents of the US and EU right now. Hopefully soon other countries.

yalogin 7y ago

Can someone tell me what a Lambda school is? From the comments here it appears its a specific class of school. From their site it just looks like a regular online learning company.

shuckles 7y ago
Online learning company with a founder good at growth hacking attention on Twitter, as well as one of the more outspoken advocates for Income Share Agreements in media.
chx 7y ago
> From the comments here it appears its a specific class of school. From their site it just looks like a regular online learning company. It is not a class of school, it is indeed a company. A scam/cult masquerading as a startup. It's hyped, it's batshit insane. A thread from yesterday https://twitter.com/KeziyahL/status/1155154616281178114 https://twitter.com/KeziyahL/status/1155154616281178114 but of course there is more. To me, it was obvious there is something wrong because PaulG often raved about it and nothing good comes out of that. You can't growth hack education. Humans don't work like that. I started a (very small, very unprofitable) school in a far away country and also happen to have a teacher's degree and oh boy. As for scam, just look at their website. > "Pay $0 tuition until you land a high-paying job Lambda covers your tuition costs until you're making at least $50,000 a year. " How is $50 000 a high paying job? According to the SSA, the average wage in 2017 was $48,251.57. Also, the 17% is calculated from before tax but paid after tax. So if you earn 50K, take home 40K then Lambda doesn't take 6800, no they will take 8500. > "You can choose to pay $20k upfront for Lambda tuition ... You'll never pay more than $30k ..." Wait, you are charging 50% interest? Possibly over two years?
- austenallred 7y ago
  > To me, it was obvious there is something wrong because PaulG often raved about it and nothing good comes out of that. Just pointing out how funny it is for someone to say that nothing good comes from PG... on HackerNews

AJRF 7y ago

https://twitter.com/Austen/status/1153451563664343040 https://twitter.com/Austen/status/1153451563664343040

austenallred 7y ago
This was for a different state! And it was a full-time contract lawyer and my assistant (pictured); our first legal hire joins later next month.

randyrand 7y ago

Looking at the text of the fine, you can't charge money to teach people things ("offer education" in their parlence) in a physical location without state approval. Could that be any more broad? Education is often just verbal and written communication between people. Seems like a first amendment violation.

gruez 7y ago
>you can't charge money to teach people things [...] >Seems like a first amendment violation. The key phrase here is charging money. Commercial speech has always been more strictly regulated than other forms of speech.
- nokcha 7y ago
  "Commercial speech" refers to advertising, or more precisely, speech that "proposes a commercial transaction". It does not refer to speech that is charged for. Newspapers and books are fully protected by the First Amendment even though people pay for them.
  - charrondev 7y ago
    Isn’t there specific wording for the press? > Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances. It clearly distinguishes the press as different from speech, but teaching someone certainly seems like it would fall under normal speech.
  - thaumasiotes 7y ago
    > "Commercial speech" refers to advertising, or more precisely, speech that "proposes a commercial transaction". It does not refer to speech that is charged for. Unfortunately, there is a received "professional speech" semi-exception to the First Amendment, explaining things like how there can be laws against charging money for legal advice (pure speech) without a state license. I assume that's what California is thinking here.

pl0x 7y ago

How is Lamda School any different from Thinkful who has been doing this for over a decade? I have a few friends interested in online bootcamps?

austenallred 7y ago
Different curriculum, different instructional design, different length, different approach to hiring partners

ddebernardy 7y ago

It's not everyday where you see a typo on a numeric value in a legal document: https://i.imgur.com/CKt5ZGT.png https://i.imgur.com/CKt5ZGT.png (notice the $75,0000.00 - in bold, no less)

camhart 7y ago
Found this too... quite funny.

mtrombetti 7y ago

Why does Lamda School need to be registered in California and not somewhere else?

passivepinetree 7y ago
Reading the currently top-rated comment from the co-founder of Lambda School, it looks like they must register in all states: https://news.ycombinator.com/item?id=20555707 https://news.ycombinator.com/item?id=20555707

westonplatter0 7y ago

@austenallred - sorry about the hiccup. Sucks to get caught on the wrong side of regulations. Thanks for being so incredibly open about it. Cheering for LS.

wishinghand 7y ago

Something very similar happened to Origin Code Academy in San Diego. I believe their situation is that one of the state bodies told them they would be exempt from a certain type of tax. Once they registered and were approved, they were then asked to pay their back taxes which they of course didn't have saved up.

hiei 7y ago

Lambda employees always do PR damage on HN. Had commented about a poor experience of mine and was told to reach out via email, no response ever. They're all talk.

austenallred 7y ago
When did this happen? I can look into it
- hiei 7y ago
  https://news.ycombinator.com/item?id=19375303 https://news.ycombinator.com/item?id=19375303

sethammons 7y ago

I decided to parse what was given to them. Slightly restructured: > A person shall not open, conduct, or do business as a private postsecondary educational institution (a private entity with a physical presence in this state that offers – advertise, publicize, solicit, or recruit – postsecondary education to the public for an institutional charge) in this state without obtaining an approval to operate under this chapter. The institution must be approved to operate, which means approved to establish, keep, or maintain any facility or location in this state where, or from which, or through which, postsecondary education programs are provided. I think the key part is the determination of their location. Their California headquarters counts as a facility through which programs are provided. The fact that the classes are fully online is unrelated. They would have to argue that their headquarters don't have anything to do with providing postsecondary education programs.

austenallred 7y ago
Our instructors aren't in California, though, which is why our counsel thought we were OK.

macinjosh 7y ago

Why does anyone need permission from The State to teach? Seems like a violation of the first amendment.

bontaq 7y ago
Wait until you hear that you can't lie about being a doctor. It's beneficial for society to make sure entities representing that they are something, actually are that something.

macinjosh 7y ago

Feel sorry for all the suckers who pay these Lambda folks tens of thousands of dollars to learn something that can easily be self taught through the plethora of blogs, videos, e-books, etc. available online.

RA_Fisher 7y ago

Folks get jealous of success.

chasontherobot 7y ago

And this is why we need more regulations on the "Bootcamp" industry: https://twitter.com/KeziyahL/status/1155154616281178114 https://twitter.com/KeziyahL/status/1155154616281178114

kevintb 7y ago
This needs to be higher up. HN reserves skepticism for so many bootcamps but throw all their judgement out the window when it comes with Lambda School.
deleted 7y ago
[deleted]

29_29 7y ago

Many states are light touch. California is a heavy touch state. Our hands are everywhere and all over you.

siruncledrew 7y ago

Everyone complaining about regulation should take a read through Common Law on Wikipedia and understand how U.S. regulation ends up more additive than subtractive in many cases over the years. The reason we have inordinate amounts of regulations to fill out paperwork for is because “reason” doesn’t work the same way in law as it does in practicality. What’s absurdly stupid in layman’s situations is but a part of the game of legal chess in court. We could have a law that says “Use common sense and don’t be an idiot”, which makes perfect sense in theory, and without very specific precedents will debated to hell in court with how common law cases work. We end up with a lot of nonsense clauses and rules and requirements due to this, but it also is how chaos is supposed to be kept in check from erupting at the seams when people use lack of specific regulation as an incentive to find ways to screw other people over.

tomohawk 7y ago

Our universities regularly award high priced degrees that lack the important quality of employability. Unsophisticated (18 yo) purchasers of these degrees go deeply into debt, lured by false promises. So much for regulation.