7 ms·

Colleges are predatory, putting kids deep into debt that they may never be able to repay and can't even remove with bankruptcy. And said debt has exploded in re

Colleges are predatory, putting kids deep into debt that they may never be able to repay and can't even remove with bankruptcy. And said debt has exploded in recent decades with no corresponding improvement in outcomes. Whereas Lambda aligns their interests with the student. If their students don't get a job, Lambda doesn't get paid. Why is a better model being attacked like this?

sandofsky 6y ago
> Colleges are predatory, putting kids deep into debt that they may never be able to repay and can't even remove with bankruptcy. We're not talking about colleges. The fact other scams exist in the world has zero bearing on whether one specific company is scamming people. > Whereas Lambda aligns their interests with the student. They align themselves with their investors. That's their fiduciary duty. If you want to understand how their model doesn't necessary align with students, here's a good starting point: https://applieddivinitystudies.com/lambda-lies/ https://applieddivinitystudies.com/lambda-lies/ > If their students don't get a job, Lambda doesn't get paid. When a student signs an ISA, Lambda School is immediately paid by reselling that debt to hedge funds.
- exporectomy 6y ago
  We are implicitly comparing it to colleges and every other competitor. That's what relative words like the way "predatory" is used here mean. Predatory relative to the rest of the field. It doesn't really have an absolute meaning.
  - slow_donkey 6y ago
    I haven't reviewed their numbers recently but the historical criticism is that you end up paying more money for Lambda yet their placement rate was lower compared to similar bootcamps.
    - qPM9l3XJrF 6y ago
      Would you say Santa Clara University is a "predatory university" if the average tuition is higher than UC Berkeley, yet the starting salary of their grads is lower?
- cornel_io 6y ago
  If ISAs don't pay out, then hedge funds will not be willing to pay as much to buy them. So at least on that point, the mere fact that they're sold off doesn't cause any misalignment.
  - mszyndel 6y ago
    _laughs in 2008 subprime mortgages_
    - cornel_io 6y ago
      I take your point, but also don't think that the repackaging of shitty loans into bundles that are somehow magically considered less shitty is happening at that scale anymore. And frankly, ISAs are a lot less shitty than home purchase loans to unemployed people who have near zero likelihood of paying it back unless that home goes up in value. Even if it was happening, there's no incentive towards an upwards price spiral in the code bootcamp space at the current demand levels (and the elasticity curve is very different in scalable bootcamps as compared to housing). Had the dumb manipulations not happened, loans are actually quite straightforward to value, so I would be shocked if whoever was purchasing the ISAs didn't have at least a "much better than HN" view into what they should properly be worth.
    - deleted 6y ago
      [deleted]
- FlyingSnake 6y ago
  > Colleges are predatory I see this argument all the time when such predatory bootcamps are brought up. Firstly Universities, notwithstanding their shortcomings, have a long history going back to millennia. Their importance in human history is unparalleled. While some US American universities have turned into debt traps, it's not the same case universally. It is unfair to compare these predatory bootcamps with universities.
  - beckman466 6y ago
    > Firstly Universities, notwithstanding their shortcomings, have a long history going back to millennia. Their importance in human history is unparalleled. Capitalist academia is an essential part of empire. Although claimed as the opposite (“Die Luft der Freiheit weht”), capitalist academia often blocks the diffusion of innovation by commoditizing and monopolizing new advancements in science and technology, and working side by side with capitalist firms to help line up new intellectual laborers (members of the working class) to exploit. "Place Silicon Valley in its proper historical context and you see that, despite its mythology, it’s far from unique. Rather, it fits into a pattern of rapid technological change which has shaped recent centuries. In this case, advances in information technology have unleashed a wave of new capabilities. Just as the internal combustion engine and the growth of the railroads created Rockefeller, and the telecommunications boom created AT&T, this breakthrough enabled a few well-placed corporations to reap the rewards. By capitalising on network effects, early mover advantage, and near-zero marginal costs of production, they have positioned themselves as gateways to information, giving them the power to extract rent from every transaction. Undergirding this state of affairs is a set of intellectual property rights explicitly designed to favour corporations. This system — the flip side of globalisation — is propagated by various trade agreements and global institutions at the behest of the nation states who benefit from it the most. It’s no accident that Silicon Valley is a uniquely American phenomenon; not only does it owe its success to the United States’ exceptionally high defence spending — the source of its research funding and foundational technological breakthroughs — that very military might is itself what implicitly secures the intellectual property regime. Seen in that light, tech’s recent development begins to look rather different. Far from launching a new era of global prosperity, it has facilitated the further concentration of wealth and power. By virtue of their position as digital middlemen, Silicon Valley companies are able to extract vast amounts of capital from all over the world. The most salient example is Apple: recently crowned the world’s most valuable company, Apple rakes in enormous quarterly profits even as the Chinese workers who actually assemble its products are driven to suicide." [1] What I'm saying is that we can have innovation, technology and science, without today’s capitalist Intellectual Property system, and without the gatekeeping of capitalist academia. As Wendy described above, we have a capitalist government that enables a small amount of capitalist firms to violently exclude and deprive others when they are given a monopoly on a piece of knowledge. Through the ’great man theory’ and the ‘lone genius myth’ [2] these capitalist governments then also enable Silicon Valley capitalist firms (and their grandiose CEO’s) to take credit for any new advancements, despite all of the innovation actually being made possible by government subsidies and government-funded research [3 - Mariana Mazzucato has done a fantastic job highlighting how all the tech breakthroughs in the iPhone were made possible by taxpayer]. In other words: Silicon Valley mythology is making us pay for technology two times. The first time through tax by the capitalist state, and the second time we are paying through economic rents/taxes levied by the capitalist state on behalf of capitalist firms [4]. Both Lambda school and capitalist universities are a part of this larger issue: the violent gatekeeping of knowledge that disinherits and exploits the working class, over and over again. I'm not at all trying to downplay the toxicity of selling off student debt to Venture Capital firms, as is done by Lambda school. That is seriously messed up. I'm saying that to make a better society we need a new system for the digital age that de-commoditizes knowledge and gives each child equal access to the sum total of all human knowledge. We’ve let dogmatic ideas lead to a system that criminalizes curiosity. That criminalizes the act of asking questions. I want us to end this plunder of the commons right now. Seriously, who do capitalists think they are, commoditizing knowledge like this? They are building a tiny sandcastle of privatized knowledge on a snowy mountain that is immeasurable inheritance left behind by our ancestors, not to mention that all of the actual work is being done by intellectual laborers who are part of the working class, and who are therefore not the owners of the this proprietary technology themselves, and who are only paid a wage (while being kept docile by ‘company perks’). By and large the general public still believes in our patent system due to a further set of myths. They are told IP laws are justified because they give inventors time to commercialize. If only this were still true. It isn’t. And it hasn't been for the last few decades. Capitalist firms now predominantly use trade secret laws to commoditize and monopolize knowledge: “Patents are typically viewed as a cornerstone of intellectual property licensing. The licensing landscape, however, has been changing. In recent years, trade secrets have become “the crown jewels of corporations” and “workhorse[s] of technology transfer.” Recent court decisions on trade secret misappropriation exhibit damage awards that are in the hundreds of millions or even billions of dollars, indicating how valuable trade secrets are to companies. Trade secrets cover 90% of all new technology; “over 80% of all license and technology transfer agreements cover proprietary know-how (trade secrets) or are hybrid agreements covering both patents and trade secrets.” Therefore, it is virtually impossible to license a patent without also transferring applicable proprietary knowledge and information. As there is always more to every invention, and certain information inevitably escapes a patent application, some commentators asserted that “a patent [is a] little more than an advertisement for the sale of accompanying know-how.”” [5] This an example of Tesla and their purchase of the trade secrets of Maxwell Technologies’ dry electrode batteries: “In 2014, Elon Musk made Tesla’s patents available for anyone to use for free, stating that “technology leadership is not defined by patents. But do patents stifle progress, and will releasing patents really have this result? […] Patents are a trade with a government. The inventor agrees to disclose the invention to the public in exchange for a limited exclusive right to the invention. […] It is exceedingly rare that an inventor comes up with something completely new. Virtually all inventions are the result of combining existing elements and adding something new. […] Tesla recently acquired battery manufacturer Maxwell Technologies’ company for $218 million to learn its trade secrets for dry electrode batteries. Obviously, Musk values trade secrets, and he must believe that they do not stifle progress, or he would have released them to the public as well. However, trade secrets do not promote the progress of innovation. Trade secrets stifle progress. […] [W]hen an invention could be patented, keeping it as a trade secret denies the public knowledge of how the invention works, which in turn denies the public the ability to improve, combine, or invent around the invention. [...] Trade secrets have become the preferred invention protection choice of many tech multinationals. […] Hiding inventions as trade secrets acts to protect these huge multinational corporations […]. This is the reason that huge multinationals lobby so hard for strong trade secret laws and weak patent laws. This is clearly shown in Musk’s low valuation of his patents and high valuation of trade secrets. Trade secret protection for inventions that could otherwise be patented is bad public policy because it stifles the progress of innovation and it consolidates money, markets and power into a few huge corporations […]” [6] [1] https://tribunemag.co.uk/2019/01/abolish-silicon-valley https://tribunemag.co.uk/2019/01/abolish-silicon-valley [2] https://www.technologyreview.com/2015/08/04/166593/techs-enduring-great-man-myth/ https://www.technologyreview.com/2015/08/04/166593/techs-end... [3] https://nintil.com/mazzucato-and-the-iphone-i/ https://nintil.com/mazzucato-and-the-iphone-i/ [4] https://www.resilience.org/stories/2017-08-03/book-day-corruption-capitalism-guy-standing/ https://www.resilience.org/stories/2017-08-03/book-day-corru... [5] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2334060 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2334060 [6] https://www.ipwatchdog.com/2019/02/19/dont-fooled-patent-purge-elon-musk-just-another-hypocritical-tech-billionaire/ https://www.ipwatchdog.com/2019/02/19/dont-fooled-patent-pur...
- deleted 6y ago
  [deleted]
- jalcazar 6y ago
  Can Lambda School still sell the debt to hedge funds without the student getting a job ?
  - austenallred 6y ago
    We sell it to an SPV that we own, and have to pay back the amount that is received.
- austhrow743 6y ago
  >When a student signs an ISA, Lambda School is immediately paid by reselling that debt to hedge funds. Hedge funds are not stupid. They'll be taking repayment rates by students in to consideration with regard to what they'll pay. So it still stands that bootcamp students getting good jobs is the outcome both Lambda and the student wants. Factoring is a standard, entirely benign activity done by businesses in a wide range of industries. Pretty much any growing company with long term payment terms is going to be doing it. Companies offering net 30, let alone Lambda's 730. Whole selling to hedge funds angle is fluff.
- austenallred 6y ago
  That isn't how any of this works. There has been a constant allegation that Lambda School sells its ISAs and therefore no longer has incentives that are aligned with students. The assertion is that, in “Big Short” style, we sell off all the risk of our students being placed to someone else and don’t have to care about outcomes. Nothing could be further from the truth. When Lambda School finances ISAs here’s how it works: We get together with investors and say, “Based on past performance, we predict this ISA will be worth $x.” We can then receive an advance of $x, minus interest and a possible margin of error. Importantly: 1. That amount needs to be paid back, plus interest. 2. If the value of the ISAs ends up being less than predicted, either we have to reimburse investors for the loss, or we won’t be able to continue borrowing in the future. This is not a unique or predatory structure in any way. If a student drops out, doesn’t get hired, or doesn’t pay back, Lambda School makes less money. If a student does great, gets hired, and pays back quickly, Lambda School makes more money. This is not a scandal, and holds true to incentive alignment in any way. Lambda School remains entirely aligned with its students.
  - sugarwater 6y ago
    After Lambda School completely removed code review, grading, attendance, TLs when I was enrolled... I just couldn't see how the incentives were aligned anymore. There was no one looking at my assignments, my assessments, my projects and telling me what I got wrong and how I could do better. Those choices made by Lambda only hurt students' learning and therefore chances to get a job. And when students complained, the school addressed the complaints but barely made a change.
    - sjg007 6y ago
      Pair programming is the best way to learn so that's unfortunate.
      - odshoifsdhfs 6y ago
        I wish people would stop saying things like this. Nothing against you, but no, pair programming is not the best way to learn. There are various learning styles and people fall in diverse ways to learn best. I hate visual and social learning. Just doesn't work for me. Youtube videos and pair programming is just the worst thing you can do for me if you want me to retain any information. While some say there is 8, others 4, others 6, (mainly some divide some items in 2 vs 1), people are different and learn in different ways. Heck, just the amount of teaching styles/methods should be a good hint that there is no size fits all when it comes to learning. Source: Childhood education degree + years of researching the topic.
slow_donkey 6y ago
I highly recommend reading Vincent Woo's piece about Lambda to understand the criticism better with actual evidence. https://vincentwoo.com/2020/05/19/on-lambda-school/ https://vincentwoo.com/2020/05/19/on-lambda-school/ It's also arguably not an equivalent comparison. Many people attending these bootcamps have already graduated college and tend to forgo work to attend - there is a huge opportunity cost even if they don't directly lose money. I have no reason to believe the model wouldn't work, but there's ample evidence that the implementation of the model via Lambda is flawed.
- sanxiyn 6y ago
  And there isn't a huge opportunity cost attending colleges?
- barry-cotter 6y ago
  People also forgo work to attend college so that equivalency argument works perfectly, except that college isn’t free so the expense is higher.
imtringued 6y ago
I agree, the model is good. However, Lambda school itself is crap and worse than a regular Bootcamp.
Tomminn 6y ago
Then great, you'll be interested in a salary sharing agreement with me. I promise to impart wisdom upon you that will help you get a job over 100k, and ONLY if you get such a job, ONLY then do you have to give me 30% of your earnings for ONLY 2 years. Do we have a deal? Also, this offer is extended to ANYONE reading. I'm that generous. * * * Breaking character now. If there is any volatility in peoples lifetime earnings, agreements such as these will generate revenue even if the school provides nothing. It may very well be that the most profitable state of the school is to contribute precisely nothing to peoples careers, because that requires the lowest financial investment from the wisdom provider.
- offtop5 6y ago
  Factor in most of America makes less than 50,000 a year. If you go out to a small town and pitch this offer you would have no shortage of people ready to sign up.
- deleted 6y ago
  [deleted]
Grustaf 6y ago
Surely you are conflating student loan institutions with colleges?
offtop5 6y ago
College is more about learning how to communicate with other adults, and building a solid social circle. There's a very real stratification between people who finish college, and people who don't. For example you're far likely to meet a quality partner attending, or being someone who previously attended college. I'd always tell people to go to the absolute cheapest college they can if they can't get a scholarship, but you still need to go. Given the American educational system, your average high school graduate can barely read and write. I recall once I was talking to an international student who was ashamed he needed to take remedial English at college, I then let him know I knew at least one person who as a native English speaker needed to take the same class. Exceptions do exist, I have noticed those from upper middle class backgrounds often can skip college altogether as they already carry with them a sort of status. But for someone who grew up poor like me college was a requirement
luxuryballs 6y ago
Peter Schiff said it best “these kids are graduating with a mortgage and no house”.
- runno 6y ago
  Peter Schiff is a hero.
- tzs 6y ago
  The average student loan debt at graduation is $30k [1]. That's very nice car money, not house money. [1] https://www.usnews.com/education/best-colleges/paying-for-college/articles/see-how-student-loan-borrowing-has-risen-in-10-years https://www.usnews.com/education/best-colleges/paying-for-co...
runno 6y ago
College debt will be forgiven in this administration, so you have to be really dumb to pay for Lambda school, which isn't backed by the government and isn't going to be forgiven. Lambda preys on the dumbest of the dumb, only dumb people are paying for school with their own money.
- splistud 6y ago
  Here's another dumb thing: believing politicians that tell you what you want to hear.
  - runno 6y ago
    I'm extremely skeptical of politicians. I give it a high probability chance of being forgiven, although I agree it's not a 100%. If it isn't, it will be inflated away through dollar devaluation and inflation. So, why would someone pay for their school and go to Lambda or have a high probability of school debt being forgiven going the traditional route? This isn't rocket science here. And your comment is quite insulting to assume that a commenter on HN would just 'believe' politicians or that I would want college debt forgiveness. I'm a libertarian. I don't want any bailouts, but I understand human nature and incentives so I know the bailout of college debt is coming.

sandofsky 6y ago

> Colleges are predatory, putting kids deep into debt that they may never be able to repay and can't even remove with bankruptcy. We're not talking about colleges. The fact other scams exist in the world has zero bearing on whether one specific company is scamming people. > Whereas Lambda aligns their interests with the student. They align themselves with their investors. That's their fiduciary duty. If you want to understand how their model doesn't necessary align with students, here's a good starting point: https://applieddivinitystudies.com/lambda-lies/ https://applieddivinitystudies.com/lambda-lies/ > If their students don't get a job, Lambda doesn't get paid. When a student signs an ISA, Lambda School is immediately paid by reselling that debt to hedge funds.

exporectomy 6y ago
We are implicitly comparing it to colleges and every other competitor. That's what relative words like the way "predatory" is used here mean. Predatory relative to the rest of the field. It doesn't really have an absolute meaning.
- slow_donkey 6y ago
  I haven't reviewed their numbers recently but the historical criticism is that you end up paying more money for Lambda yet their placement rate was lower compared to similar bootcamps.
  - qPM9l3XJrF 6y ago
    Would you say Santa Clara University is a "predatory university" if the average tuition is higher than UC Berkeley, yet the starting salary of their grads is lower?
cornel_io 6y ago
If ISAs don't pay out, then hedge funds will not be willing to pay as much to buy them. So at least on that point, the mere fact that they're sold off doesn't cause any misalignment.
- mszyndel 6y ago
  _laughs in 2008 subprime mortgages_
  - cornel_io 6y ago
    I take your point, but also don't think that the repackaging of shitty loans into bundles that are somehow magically considered less shitty is happening at that scale anymore. And frankly, ISAs are a lot less shitty than home purchase loans to unemployed people who have near zero likelihood of paying it back unless that home goes up in value. Even if it was happening, there's no incentive towards an upwards price spiral in the code bootcamp space at the current demand levels (and the elasticity curve is very different in scalable bootcamps as compared to housing). Had the dumb manipulations not happened, loans are actually quite straightforward to value, so I would be shocked if whoever was purchasing the ISAs didn't have at least a "much better than HN" view into what they should properly be worth.
  - deleted 6y ago
    [deleted]
FlyingSnake 6y ago
> Colleges are predatory I see this argument all the time when such predatory bootcamps are brought up. Firstly Universities, notwithstanding their shortcomings, have a long history going back to millennia. Their importance in human history is unparalleled. While some US American universities have turned into debt traps, it's not the same case universally. It is unfair to compare these predatory bootcamps with universities.
- beckman466 6y ago
  > Firstly Universities, notwithstanding their shortcomings, have a long history going back to millennia. Their importance in human history is unparalleled. Capitalist academia is an essential part of empire. Although claimed as the opposite (“Die Luft der Freiheit weht”), capitalist academia often blocks the diffusion of innovation by commoditizing and monopolizing new advancements in science and technology, and working side by side with capitalist firms to help line up new intellectual laborers (members of the working class) to exploit. "Place Silicon Valley in its proper historical context and you see that, despite its mythology, it’s far from unique. Rather, it fits into a pattern of rapid technological change which has shaped recent centuries. In this case, advances in information technology have unleashed a wave of new capabilities. Just as the internal combustion engine and the growth of the railroads created Rockefeller, and the telecommunications boom created AT&T, this breakthrough enabled a few well-placed corporations to reap the rewards. By capitalising on network effects, early mover advantage, and near-zero marginal costs of production, they have positioned themselves as gateways to information, giving them the power to extract rent from every transaction. Undergirding this state of affairs is a set of intellectual property rights explicitly designed to favour corporations. This system — the flip side of globalisation — is propagated by various trade agreements and global institutions at the behest of the nation states who benefit from it the most. It’s no accident that Silicon Valley is a uniquely American phenomenon; not only does it owe its success to the United States’ exceptionally high defence spending — the source of its research funding and foundational technological breakthroughs — that very military might is itself what implicitly secures the intellectual property regime. Seen in that light, tech’s recent development begins to look rather different. Far from launching a new era of global prosperity, it has facilitated the further concentration of wealth and power. By virtue of their position as digital middlemen, Silicon Valley companies are able to extract vast amounts of capital from all over the world. The most salient example is Apple: recently crowned the world’s most valuable company, Apple rakes in enormous quarterly profits even as the Chinese workers who actually assemble its products are driven to suicide." [1] What I'm saying is that we can have innovation, technology and science, without today’s capitalist Intellectual Property system, and without the gatekeeping of capitalist academia. As Wendy described above, we have a capitalist government that enables a small amount of capitalist firms to violently exclude and deprive others when they are given a monopoly on a piece of knowledge. Through the ’great man theory’ and the ‘lone genius myth’ [2] these capitalist governments then also enable Silicon Valley capitalist firms (and their grandiose CEO’s) to take credit for any new advancements, despite all of the innovation actually being made possible by government subsidies and government-funded research [3 - Mariana Mazzucato has done a fantastic job highlighting how all the tech breakthroughs in the iPhone were made possible by taxpayer]. In other words: Silicon Valley mythology is making us pay for technology two times. The first time through tax by the capitalist state, and the second time we are paying through economic rents/taxes levied by the capitalist state on behalf of capitalist firms [4]. Both Lambda school and capitalist universities are a part of this larger issue: the violent gatekeeping of knowledge that disinherits and exploits the working class, over and over again. I'm not at all trying to downplay the toxicity of selling off student debt to Venture Capital firms, as is done by Lambda school. That is seriously messed up. I'm saying that to make a better society we need a new system for the digital age that de-commoditizes knowledge and gives each child equal access to the sum total of all human knowledge. We’ve let dogmatic ideas lead to a system that criminalizes curiosity. That criminalizes the act of asking questions. I want us to end this plunder of the commons right now. Seriously, who do capitalists think they are, commoditizing knowledge like this? They are building a tiny sandcastle of privatized knowledge on a snowy mountain that is immeasurable inheritance left behind by our ancestors, not to mention that all of the actual work is being done by intellectual laborers who are part of the working class, and who are therefore not the owners of the this proprietary technology themselves, and who are only paid a wage (while being kept docile by ‘company perks’). By and large the general public still believes in our patent system due to a further set of myths. They are told IP laws are justified because they give inventors time to commercialize. If only this were still true. It isn’t. And it hasn't been for the last few decades. Capitalist firms now predominantly use trade secret laws to commoditize and monopolize knowledge: “Patents are typically viewed as a cornerstone of intellectual property licensing. The licensing landscape, however, has been changing. In recent years, trade secrets have become “the crown jewels of corporations” and “workhorse[s] of technology transfer.” Recent court decisions on trade secret misappropriation exhibit damage awards that are in the hundreds of millions or even billions of dollars, indicating how valuable trade secrets are to companies. Trade secrets cover 90% of all new technology; “over 80% of all license and technology transfer agreements cover proprietary know-how (trade secrets) or are hybrid agreements covering both patents and trade secrets.” Therefore, it is virtually impossible to license a patent without also transferring applicable proprietary knowledge and information. As there is always more to every invention, and certain information inevitably escapes a patent application, some commentators asserted that “a patent [is a] little more than an advertisement for the sale of accompanying know-how.”” [5] This an example of Tesla and their purchase of the trade secrets of Maxwell Technologies’ dry electrode batteries: “In 2014, Elon Musk made Tesla’s patents available for anyone to use for free, stating that “technology leadership is not defined by patents. But do patents stifle progress, and will releasing patents really have this result? […] Patents are a trade with a government. The inventor agrees to disclose the invention to the public in exchange for a limited exclusive right to the invention. […] It is exceedingly rare that an inventor comes up with something completely new. Virtually all inventions are the result of combining existing elements and adding something new. […] Tesla recently acquired battery manufacturer Maxwell Technologies’ company for $218 million to learn its trade secrets for dry electrode batteries. Obviously, Musk values trade secrets, and he must believe that they do not stifle progress, or he would have released them to the public as well. However, trade secrets do not promote the progress of innovation. Trade secrets stifle progress. […] [W]hen an invention could be patented, keeping it as a trade secret denies the public knowledge of how the invention works, which in turn denies the public the ability to improve, combine, or invent around the invention. [...] Trade secrets have become the preferred invention protection choice of many tech multinationals. […] Hiding inventions as trade secrets acts to protect these huge multinational corporations […]. This is the reason that huge multinationals lobby so hard for strong trade secret laws and weak patent laws. This is clearly shown in Musk’s low valuation of his patents and high valuation of trade secrets. Trade secret protection for inventions that could otherwise be patented is bad public policy because it stifles the progress of innovation and it consolidates money, markets and power into a few huge corporations […]” [6] [1] https://tribunemag.co.uk/2019/01/abolish-silicon-valley https://tribunemag.co.uk/2019/01/abolish-silicon-valley [2] https://www.technologyreview.com/2015/08/04/166593/techs-enduring-great-man-myth/ https://www.technologyreview.com/2015/08/04/166593/techs-end... [3] https://nintil.com/mazzucato-and-the-iphone-i/ https://nintil.com/mazzucato-and-the-iphone-i/ [4] https://www.resilience.org/stories/2017-08-03/book-day-corruption-capitalism-guy-standing/ https://www.resilience.org/stories/2017-08-03/book-day-corru... [5] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2334060 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2334060 [6] https://www.ipwatchdog.com/2019/02/19/dont-fooled-patent-purge-elon-musk-just-another-hypocritical-tech-billionaire/ https://www.ipwatchdog.com/2019/02/19/dont-fooled-patent-pur...
deleted 6y ago
[deleted]
jalcazar 6y ago
Can Lambda School still sell the debt to hedge funds without the student getting a job ?
- austenallred 6y ago
  We sell it to an SPV that we own, and have to pay back the amount that is received.
austhrow743 6y ago
>When a student signs an ISA, Lambda School is immediately paid by reselling that debt to hedge funds. Hedge funds are not stupid. They'll be taking repayment rates by students in to consideration with regard to what they'll pay. So it still stands that bootcamp students getting good jobs is the outcome both Lambda and the student wants. Factoring is a standard, entirely benign activity done by businesses in a wide range of industries. Pretty much any growing company with long term payment terms is going to be doing it. Companies offering net 30, let alone Lambda's 730. Whole selling to hedge funds angle is fluff.
austenallred 6y ago
That isn't how any of this works. There has been a constant allegation that Lambda School sells its ISAs and therefore no longer has incentives that are aligned with students. The assertion is that, in “Big Short” style, we sell off all the risk of our students being placed to someone else and don’t have to care about outcomes. Nothing could be further from the truth. When Lambda School finances ISAs here’s how it works: We get together with investors and say, “Based on past performance, we predict this ISA will be worth $x.” We can then receive an advance of $x, minus interest and a possible margin of error. Importantly: 1. That amount needs to be paid back, plus interest. 2. If the value of the ISAs ends up being less than predicted, either we have to reimburse investors for the loss, or we won’t be able to continue borrowing in the future. This is not a unique or predatory structure in any way. If a student drops out, doesn’t get hired, or doesn’t pay back, Lambda School makes less money. If a student does great, gets hired, and pays back quickly, Lambda School makes more money. This is not a scandal, and holds true to incentive alignment in any way. Lambda School remains entirely aligned with its students.
- sugarwater 6y ago
  After Lambda School completely removed code review, grading, attendance, TLs when I was enrolled... I just couldn't see how the incentives were aligned anymore. There was no one looking at my assignments, my assessments, my projects and telling me what I got wrong and how I could do better. Those choices made by Lambda only hurt students' learning and therefore chances to get a job. And when students complained, the school addressed the complaints but barely made a change.
  - sjg007 6y ago
    Pair programming is the best way to learn so that's unfortunate.
    - odshoifsdhfs 6y ago
      I wish people would stop saying things like this. Nothing against you, but no, pair programming is not the best way to learn. There are various learning styles and people fall in diverse ways to learn best. I hate visual and social learning. Just doesn't work for me. Youtube videos and pair programming is just the worst thing you can do for me if you want me to retain any information. While some say there is 8, others 4, others 6, (mainly some divide some items in 2 vs 1), people are different and learn in different ways. Heck, just the amount of teaching styles/methods should be a good hint that there is no size fits all when it comes to learning. Source: Childhood education degree + years of researching the topic.

slow_donkey 6y ago

I highly recommend reading Vincent Woo's piece about Lambda to understand the criticism better with actual evidence. https://vincentwoo.com/2020/05/19/on-lambda-school/ https://vincentwoo.com/2020/05/19/on-lambda-school/ It's also arguably not an equivalent comparison. Many people attending these bootcamps have already graduated college and tend to forgo work to attend - there is a huge opportunity cost even if they don't directly lose money. I have no reason to believe the model wouldn't work, but there's ample evidence that the implementation of the model via Lambda is flawed.

sanxiyn 6y ago
And there isn't a huge opportunity cost attending colleges?
barry-cotter 6y ago
People also forgo work to attend college so that equivalency argument works perfectly, except that college isn’t free so the expense is higher.

imtringued 6y ago

I agree, the model is good. However, Lambda school itself is crap and worse than a regular Bootcamp.

Tomminn 6y ago

Then great, you'll be interested in a salary sharing agreement with me. I promise to impart wisdom upon you that will help you get a job over 100k, and ONLY if you get such a job, ONLY then do you have to give me 30% of your earnings for ONLY 2 years. Do we have a deal? Also, this offer is extended to ANYONE reading. I'm that generous. * * * Breaking character now. If there is any volatility in peoples lifetime earnings, agreements such as these will generate revenue even if the school provides nothing. It may very well be that the most profitable state of the school is to contribute precisely nothing to peoples careers, because that requires the lowest financial investment from the wisdom provider.

offtop5 6y ago
Factor in most of America makes less than 50,000 a year. If you go out to a small town and pitch this offer you would have no shortage of people ready to sign up.
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Grustaf 6y ago

Surely you are conflating student loan institutions with colleges?

offtop5 6y ago

College is more about learning how to communicate with other adults, and building a solid social circle. There's a very real stratification between people who finish college, and people who don't. For example you're far likely to meet a quality partner attending, or being someone who previously attended college. I'd always tell people to go to the absolute cheapest college they can if they can't get a scholarship, but you still need to go. Given the American educational system, your average high school graduate can barely read and write. I recall once I was talking to an international student who was ashamed he needed to take remedial English at college, I then let him know I knew at least one person who as a native English speaker needed to take the same class. Exceptions do exist, I have noticed those from upper middle class backgrounds often can skip college altogether as they already carry with them a sort of status. But for someone who grew up poor like me college was a requirement

luxuryballs 6y ago

Peter Schiff said it best “these kids are graduating with a mortgage and no house”.

runno 6y ago
Peter Schiff is a hero.
tzs 6y ago
The average student loan debt at graduation is $30k [1]. That's very nice car money, not house money. [1] https://www.usnews.com/education/best-colleges/paying-for-college/articles/see-how-student-loan-borrowing-has-risen-in-10-years https://www.usnews.com/education/best-colleges/paying-for-co...

runno 6y ago

College debt will be forgiven in this administration, so you have to be really dumb to pay for Lambda school, which isn't backed by the government and isn't going to be forgiven. Lambda preys on the dumbest of the dumb, only dumb people are paying for school with their own money.

splistud 6y ago
Here's another dumb thing: believing politicians that tell you what you want to hear.
- runno 6y ago
  I'm extremely skeptical of politicians. I give it a high probability chance of being forgiven, although I agree it's not a 100%. If it isn't, it will be inflated away through dollar devaluation and inflation. So, why would someone pay for their school and go to Lambda or have a high probability of school debt being forgiven going the traditional route? This isn't rocket science here. And your comment is quite insulting to assume that a commenter on HN would just 'believe' politicians or that I would want college debt forgiveness. I'm a libertarian. I don't want any bailouts, but I understand human nature and incentives so I know the bailout of college debt is coming.