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I'm not following. Afaik Lambda didn't collapse. It recently rebranded due to a trademark conflict, but they're still alive and well from what I gather. Someone

I'm not following. Afaik Lambda didn't collapse. It recently rebranded due to a trademark conflict, but they're still alive and well from what I gather. Someone be so kind to explain?

ilamont 5y ago
Lambda School leaked documents show poor performance over the last two years https://news.ycombinator.com/item?id=28989092 https://news.ycombinator.com/item?id=28989092 Lambda School agrees to end deceptive educational financing practices https://news.ycombinator.com/item?id=26946972 https://news.ycombinator.com/item?id=26946972
gonehome 5y ago
There's nothing to follow - most of the comments here are wrong. ISAs align incentives between teaching institutions and students, they're strictly better than the tuition model. They don't fix all issues because they still require selectivity on admissions (since the school needs to students to succeed in order to survive). ISAs are also not guaranteed to be good, but the ones originally used by Lambda School were good (Lambda School is somewhat of a third rail topic on HN, so it's worth just considering the terms). - Only require repayment if students gets a software job making >50k. - Payment was bounded to 10yr or 30k whatever happens first. Compare to college tuition which charges huge sums of money often paid for by non-defaultable loans and schools don't really care if students ever get employed by anyone. From his tweet thread conclusion: 1. Consumers are confused by ISAs 2. And when they take the deal, they often behave poorly 3. And when they behave poorly, you don't have great recourse 4. And there's a looming regulatory threat 5. And the financial markets aren't supportive My takeaway from this is that it's harder to build an incentive aligned business that really gets students to succeed than it is to take their money as tuition and not have to worry about that so much for business building. I guess I'd argue no shit - that's why ISAs are better, they force the companies to be good at getting positive student outcomes because it's an existential risk if they don't. That's kind of the entire point.
- michaelt 5y ago
  > ISAs align incentives between teaching institutions and students, they're strictly better than the tuition model. Well, there's two ways you could operate an ISA: 1. You invest $20k in each student, carefully selecting only the applicants who are most likely to succeed, and giving them the most impactful, high-ROI courses you can, so that they almost all repay at least $20k 2. You invest $500 in each student using prerecorded video classes and assignments graded by unpaid 'mentors', take on far more students, and every time you luck into a student who repays $30k that's pure profit, baby.
  - Dylan16807 5y ago
    Compare to the tuition equivalents: 1. Invest $20k in each student, etc. 2. Invest $500 in each student, and get paid $20k in pure profit right away, baby. So while the ISA model doesn't prevent scammers, I have no counterargument to "they're strictly better than the tuition model".
  - Jach 5y ago
    This is true and one of the initial criticisms of "there's not necessarily incentive alignment here" I thought of when I first encountered the idea. Hearing about #2 happen in reality is also sad. Though I think over longer periods more competition and reputation trashing has a chance to correct some of #2. Nevertheless I think "University" of Phoenix is still operating and hoovering up tax payer money despite being an internet punching bag for years, so...
  - bertjk 5y ago
    You missed a third way which I think is actually most likely, given recent monetary stimulus policies: 3. You invest $500 in each student using prerecorded video classes and assignments graded by unpaid 'mentors', take on far more students, then structure groups of ISAs together into ISA-backed bonds, which you then sell to pension funds and other institutional investors for 15% off par value, or $25.5k each. Not only do you get paid up front, but whether or not the ISAs eventually get paid back is no longer your problem. Also now instead of recruiting and vetting 200 teachers to teach your 2000 students, you recruit 10 teachers and a couple experienced sell-side traders and analysts.

I'm not following. Afaik Lambda didn't collapse. It recently rebranded due to a trademark conflict, but they're still alive and well from what I gather. Someone be so kind to explain?

ilamont 5y ago

Lambda School leaked documents show poor performance over the last two years https://news.ycombinator.com/item?id=28989092 https://news.ycombinator.com/item?id=28989092 Lambda School agrees to end deceptive educational financing practices https://news.ycombinator.com/item?id=26946972 https://news.ycombinator.com/item?id=26946972

gonehome 5y ago

There's nothing to follow - most of the comments here are wrong. ISAs align incentives between teaching institutions and students, they're strictly better than the tuition model. They don't fix all issues because they still require selectivity on admissions (since the school needs to students to succeed in order to survive). ISAs are also not guaranteed to be good, but the ones originally used by Lambda School were good (Lambda School is somewhat of a third rail topic on HN, so it's worth just considering the terms). - Only require repayment if students gets a software job making >50k. - Payment was bounded to 10yr or 30k whatever happens first. Compare to college tuition which charges huge sums of money often paid for by non-defaultable loans and schools don't really care if students ever get employed by anyone. From his tweet thread conclusion: 1. Consumers are confused by ISAs 2. And when they take the deal, they often behave poorly 3. And when they behave poorly, you don't have great recourse 4. And there's a looming regulatory threat 5. And the financial markets aren't supportive My takeaway from this is that it's harder to build an incentive aligned business that really gets students to succeed than it is to take their money as tuition and not have to worry about that so much for business building. I guess I'd argue no shit - that's why ISAs are better, they force the companies to be good at getting positive student outcomes because it's an existential risk if they don't. That's kind of the entire point.

michaelt 5y ago
> ISAs align incentives between teaching institutions and students, they're strictly better than the tuition model. Well, there's two ways you could operate an ISA: 1. You invest $20k in each student, carefully selecting only the applicants who are most likely to succeed, and giving them the most impactful, high-ROI courses you can, so that they almost all repay at least $20k 2. You invest $500 in each student using prerecorded video classes and assignments graded by unpaid 'mentors', take on far more students, and every time you luck into a student who repays $30k that's pure profit, baby.
- Dylan16807 5y ago
  Compare to the tuition equivalents: 1. Invest $20k in each student, etc. 2. Invest $500 in each student, and get paid $20k in pure profit right away, baby. So while the ISA model doesn't prevent scammers, I have no counterargument to "they're strictly better than the tuition model".
- Jach 5y ago
  This is true and one of the initial criticisms of "there's not necessarily incentive alignment here" I thought of when I first encountered the idea. Hearing about #2 happen in reality is also sad. Though I think over longer periods more competition and reputation trashing has a chance to correct some of #2. Nevertheless I think "University" of Phoenix is still operating and hoovering up tax payer money despite being an internet punching bag for years, so...
- bertjk 5y ago
  You missed a third way which I think is actually most likely, given recent monetary stimulus policies: 3. You invest $500 in each student using prerecorded video classes and assignments graded by unpaid 'mentors', take on far more students, then structure groups of ISAs together into ISA-backed bonds, which you then sell to pension funds and other institutional investors for 15% off par value, or $25.5k each. Not only do you get paid up front, but whether or not the ISAs eventually get paid back is no longer your problem. Also now instead of recruiting and vetting 200 teachers to teach your 2000 students, you recruit 10 teachers and a couple experienced sell-side traders and analysts.