17 ms·

CFPB Takes Action Against Coding Boot Camp BloomTech and CEO Austen Allred

• zephyric1903 3y ago
  I'm currently interviewing with them for a position as instructor. Since I'm located outside of the US, I know nothing about them and decided to do some digging, and I'm happy I did. I'm really passionate about teaching, and they have been actually scamming people instead of helping them out. I am appalled.
• Jimmc414 3y ago
  Announcement from CFPB Director https://twitter.com/chopracfpb/status/1780651320766058684 https://twitter.com/chopracfpb/status/1780651320766058684
• mistrial9 3y ago
  a quick search shows this post dated 2020 (a long time ago) https://www.applieddivinitystudies.com/lambda-lies/ https://www.applieddivinitystudies.com/lambda-lies/
  • deleted 3y ago
    [deleted]
  • taytus 3y ago
    April, 17th, 2024 https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-against-coding-boot-camp-bloomtech-and-ceo-austen-allred-for-deceiving-students-and-hiding-loan-costs/ https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes...
• Twirrim 3y ago
  This is the boot camp school formerly known as Lambda School, that came under a lot of fire in the past for these types of practices, and other issues. Previous trouble they've been in: https://dfpi.ca.gov/2021/04/26/lambda-school-reaches-settlement-with-dfpi-agreeing-to-end-deceptive-educational-financing-practices/ https://dfpi.ca.gov/2021/04/26/lambda-school-reaches-settlem... https://techcrunch.com/2021/05/13/lambda-school-lawsuits/ https://techcrunch.com/2021/05/13/lambda-school-lawsuits/
  • dylan604 3y ago
    This is one of those situations lending support to the corporate death penalty. Allowing name changes like Worldcom, Spectrum, and so on to write off some liabilities while operating as if nothing happened.
    • JumpCrisscross 3y ago
      > the corporate death penalty This is a silly idea lobbyists love because it sidesteps the actual corporate-destruction mechanism: liquidation to pay massive fines, license revocation and/or personal liability for senior management. Consider even the penalties here, which effectively ban Allred and Lambda from doing business. If you corporate death’d them, the contracts and assets would still exist. Allred would be unpunished. Everything would go back to shareholders who were presumably fine with the status quo, and would be fine putting them into a new entity that Allred could manage. Okay, so you cancel the contracts. Now the janitor who hasn’t been paid in two months is screwed. Okay, so you exempt employees. Allred’s an employee! Exempt him? What do you even pay the janitor with? Okay, exempt some assets. How many? How do you choose who must keep paying versus who is let off? Maybe pro rata? Who will administer all this? Et cetera, et cetera. Contrast that to a massive fine. Company goes Chapter 7 and into a deep body of law that has experience dealing with the above. (Ideally paired with a license revocation from any lending for Allred and the entity, in case they try to Chapter 11.) Shareholders are wiped and free to pursue Allred. Allred and Lambda are neutralised.
      • tedivm 3y ago
        Everyone I know who speaks about a corporate death penalty includes liquidation to pay pack victims. I've never heard someone argue for the corporate death penalty without "liquidation" and "license revocation and/or personal liability for senior management." The difference between this and a big fine: * Lots of big fines aren't big enough to actually kill companies that deserve it, * Fines tend to go to the government, while companies that deserve a "death penalty" often have victims who could use that money, * Bankruptcy doesn't prevent people from starting another company, or board members who failed at oversight to join another board.
• deleted 3y ago
  [deleted]
• willcipriano 3y ago
  [flagged]
  • ceejayoz 3y ago
    Any you’d like to highlight that come anywhere close to “we picked a sample size of one student” or “no finance charge means $4k finance charge”?
    • nickff 3y ago
      Colleges do tend to be a bit more careful, but they often publish hiring numbers based on graduates rather than students, when advertising. This is deceptive, because they never mention their completion rates (which are often around 50%), and significantly impacts the calculus.
      • wbl 3y ago
        The completion rates are listed online and have a standardized definition from the government.
    • throw123123123 3y ago
      Do they tell students they may be saddled with debt for 30 years and that the cost of tuition is much larger than the incomes they get from their majors?
      • ceejayoz 3y ago
        More than these folks did, for sure. > BloomTech falsely claimed its “income share” agreements were not loans, did not create debt, did not carry a finance charge, and were “risk free.” In fact, the agreements are loans with an average finance charge of $4,000. The loans carry substantial risk, as a single missed payment triggers a default and the remainder of the $30,000 “cap” becomes due immediately. BloomTech further hid the cost and nature of the “income share” loans by not disclosing key terms like the finance charge and annual percentage rate, as required by law. Student loans from a legitimate lender don't come with balloon payments, the APRs and any finance charges are clearly disclosed, etc., and they're not making up graduation rates.
• saadatq 3y ago
  Unreal: > Allred tweeted that the school achieved a 100 percent job-placement rate in one of its cohorts, and later acknowledged in a private message that the sample size was just one student.
  • tempsy 3y ago
    From what I’ve read about his career before this he was basically a growth marketer/hacker Like the only thing he knows how to do is fudge things with dark patterns to achieve growth at any cost
  • syntaxing 3y ago
    Aha that’s a gem, it’s like that crypto company listed “audited by <some famous reliable auditor >”. They do not mention they failed the audit, but they “did” get audited.
    • FireBeyond 3y ago
      Or Tether. "We realize - but hope you don't - that 'financial attestations' do not remotely resemble 'audits', but we're going to call this financial attestation an audit". And "If you don't fall for the first, we're going to tell you that we have had audits done but we won't release them because they're in Mandarin Chinese." I wish I was kidding.
  • g42gregory 3y ago
    Technically, the statement is still valid. It's just that the confidence interval will be wide. :-)
    • threeseed 3y ago
      He seems to be the king of technically. "For a few months in 2013, Allred camped out of his car while in Silicon Valley, and frequently describes this period as having been homeless. However, a deleted post on his blog titled 'Voluntarily Homeless in Silicon Valley' explains that he lived out of a car by choice."
• foobarqux 3y ago
  Remember that the initial reporting of these crimes many years ago was called a "hit piece".
• solardev 3y ago
  Are there any legit income-sharing schools of this type, tech or otherwise? Done fairly, it sounds like an interesting alternative to upfront tuition. On the surface it doesn't seem like a bad model, but of course it could be twisted to evil ends. From the article: > The loans carry substantial risk, as a single missed payment triggers a default and the remainder of the $30,000 “cap” becomes due immediately. > Students were therefore deprived of rights they should have had when their “income share” loan was sold to an investor [without the required Holder Rule provisions transferring legal responsibilities to the new owners].
  • jimberlage 3y ago
    App Academy (in a much hotter 2013 job market) honored its 10% of my first year’s salary ISA when I attended. Anecdotally from my cohort, they worked with people on missed payments without triggering a balloon repayment.
  • LamaOfRuin 3y ago
    The income based repayment plans for federal student loans are not that different (but without most of the sketchy practices). The fact that those are an option for accredited schools means I think it would be hard to make it work in a program like this. Especially if there is any sort of venture interest expecting actual returns. Actually educating people well is not cheap and I have not seen any of these programs that actually do anything innovative either.
    • solardev 3y ago
      > income based repayment plans for federal student loans Ah, I didn't realize that was a thing. That makes sense, thank you!
  • jswartz 3y ago
    > I attended Launch School and found the founder and the program to be of high quality and integrity and the success of the capstone graduates speaks for itself.
• etaioinshrdlu 3y ago
  These fines seem incredibly low to me - they're slaps on the wrist!
  • next_xibalba 3y ago
    Putting these together: "permanently bans BloomTech from all consumer-lending activities and bans Allred from any student-lending activities for ten years" "ordering BloomTech and Allred to cease collecting payments on income share loans for graduates who did not have a qualifying job, eliminate finance changes for certain agreements, and allow students the option to withdraw without penalty" This order seems like a death sentence. If ISAs are defined as consumer-lending, which the CFPB clearly says they are, BloomTech cannot recruit new customers. And they cannot collect on 50% of their outstanding loans (if the quoted internal placement rate is true).
    • janalsncm 3y ago
      > This order seems like a death sentence. Corporations aren’t people. Ordering a scammer to knock it off isn’t even close to being a serious penalty. Allred should be in prison.
      • dragonwriter 3y ago
        > Allred should be in prison. The CFPB, like every federal regulatory agency, has only direct civil enforcement powers. They refer criminal matters to the Department of Justice, which usually takes significantly longer before handing down charges, and does not usually disclose the existence of an open investigation until and unless it issues an indictment.
        • bikemore 3y ago
          I think that was more of a wishful "should" instead of a prescriptive one.
      • next_xibalba 3y ago
        > Allred should be in prison. Absurd.
• adubashi 3y ago
  There's probably a good argument to ignore rule breaking and little deceptive marketing if the student outcomes are good but it looks like in-aggregate that they weren't and that students were better off taking a loan and attending Oregon State's Post Bac in CS or Hack Reactor.
  • hocuspocus 3y ago
    And if you really believe you can succeed as an autodidact with minimal mentorship from previous batches of students, 42 schools[1] offer that for free. It's shameful YC was still shilling Lambda one year ago[2] even though there's been a mountain of evidence about its deceptive practices for many years. 1. https://www.42network.org https://www.42network.org 2. https://www.ycombinator.com/library/5N-on-starting-and-scaling-bloom-institute-of-technology https://www.ycombinator.com/library/5N-on-starting-and-scali...
    • michaelbrave 3y ago
      I'm still sad about 42 in Fremont closing, but if you live near one, it was quite worthwhile.
  • maxerickson 3y ago
    There's no reasonable argument in favor of deceptive marketing. This idea that we should tolerate bullshit from people trying to make money needs to go away. If the outcomes are good for the students, there won't be an issue with making them be straightforward about it.
  • dragonwriter 3y ago
    > There’s probably a good argument to ignore rule breaking and little deceptive marketing if the student outcomes are good A big thing that rule breaking and deceptive marketing due is cover up that the student outcomes are not good.
• petsormeat 3y ago
  It's disappointing that California's Bureau for Private and Post-Secondary Education (BPPE) continued to approve this boot camp. I thought the rationale for creating the bureau was to discourage scams in job training.
  • sandofsky 3y ago
    At first I found it weird that the BPPE can't discipline a company until it's registered and operating legally. So for the first few years, it couldn't do anything. The twist is that until the BPPE approves a school to operate, any student debt obligations up to that point are not valid. In theory, anyone in California who enrolled before August 2020 owes them nothing. The problem is that Lambda School still tries to service those debts. The victims are usually low-income, so they lack the resources to lawyer up. If they do lawyer up, they end up being forced into arbitration due to an arbitration clause in their student agreements. So in the end, it does feel like the BPPE is a half-measure that doesn't fully tackle predatory companies.
    • JumpCrisscross 3y ago
      > If they do lawyer up, they end up being forced into arbitration due to an arbitration clause in their student agreements You’re literally describing why arbitration works. Someone low income can just file for arbitration with minimal work by a lawyer. Contrast that with the tens of thousands they’d need to pay a litigator.
      • sandofsky 3y ago
        That true, but this ends up being a game of whack-a-mole, and even a few thousand dollars is too much for a lot of victims. Recently there was an attempt to mount a class action lawsuit, which would have settled things for everyone in one fell swoop, and it was rejected due to the arbitration clause.
        • JumpCrisscross 3y ago
          > even a few thousand dollars is too much for a lot of victims Someone angling to go into coding should be able to do the research to draft an arbitration claim on their own. In most cases that isn’t a fair assumption to make, but given the cohort, they should be able to collaborate on a draft. The gating part isn’t doing the work. It’s knowing you have the option to.
• wtf92345923 3y ago
  Am I crazy, or do fines never come close to matching damages? Or jailtime? I'm constantly seeing rulings or indictments where an article says "defendant faces $1500 in fines or two years jail time", as if those are in any way equivalent. Were all the fine quantities written up in 1875 and just never got updated? In this case, defendants are accused of conning "at least 11,000 income share loans" "carrying an average finance charge of around $4,000", but their fine is $164,000? A fraud of $44M just for the financing charges produces a fine of $164K? As I missing something?
  • openasocket 3y ago
    Those articles you are reading are just poorly worded. For any criminal case, it is a matter of fines AND jail time. You could be sentenced to jail time and no fines, or fines and no jail time (though this is rare), but the majority of the time you get fines and jail time. Generally, for criminal issues, the punishment is really in the jail time, the fine is just extra.
  • ryandrake 3y ago
    The US justice system and regulatory agencies treat corporations with kid gloves. They often get many strongly worded letters and many chances to correct their bad behavior before regulatory action happens, and then when it does happen, it's slow and the corporation usually continues to operate, and then when penalty comes, it's some ridiculously small fraction of the gains that came from the bad behavior, which the corporation usually appeals and gets reduced or thrown out. There are almost never company-killing fines. There are almost never consent decrees with stipulations that change the company's behavior. There are almost never instances of piercing the corporate veil and going after executives or shareholders. It's a total joke.
    • wslack 3y ago
      There's an incentive problem here because litigation is so expensive. If the fine is large enough, it becomes more and more worth it for the company to fight it in court - and therefore more expensive to the regulatory agency's legal budget. The only folks who benefit from it going to court are private lawyers. Whereas, settling meets the company's incentives (eliminating uncertainty), meets the regulator's incentives (bad behavior is stopped locally). The moral hazard created by making fraud seem less risky (because the punishments aren't that bad) is born by the public. The solution here would be to limit the possible legal shenanigans that companies can use to increase the cost of taking a case to trial.
• tempsy 3y ago
  Biggest red flag for me is Austen has basically become a full time right wing reactionary on X/Twitter
  • afavour 3y ago
    [flagged]
    • CPLX 3y ago
      You might find the book “Palo Alto” highly illuminating. I certainly did. There’s a lot more consistency in the backstory of Silicon Valley than I realized. There’s certainly an amazing culture of visionaries and innovation and creative people as well, it’s worth noting that, but there’s a deep history of sociopathic business practices as well that goes back 100+ years and is core to the identity of the Valley in general and Stanford in particular.
      • CatWChainsaw 3y ago
        [flagged]
  • jeffbee 3y ago
    [flagged]
  • ilaksh 3y ago
    [flagged]
  • beau_g 3y ago
    I don't know anything about this guy or his beliefs, but the biggest red flag for me is he has a normal name with weird spelling. I don't trust anyone with this naming configuration. normal name - normal spelling - ok weird name - normal spelling - ok weird name - weird spelling - ok normal name - weird spelling - no go I don't want to hear some Jane Austen excuse either.
• TheMagicHorsey 3y ago
  This is great. But I hope they do the same thing to so called "legitimate" universities who have long deceived students as to the value of the degrees they grant. I recently met a liberal arts student from an Ivy League university who has been under-employed for twenty years. She still has unpaid student loans and she graduated in 2007! She has had to work in retail positions from time to time. And she's considering retraining via a vocational school to be an electrician because that's what her father and brothers do and they make 300K+ a year via the family business.
  • deleted 3y ago
    [deleted]
• Jasper_ 3y ago
  https://twitter.com/austen/status/1780428614192033999 https://twitter.com/austen/status/1780428614192033999 lmao
  • ec109685 3y ago
    Well, to be fair, their base is probably pretty small right now.
• afavour 3y ago
  Honestly this ought to be an indictment against the Silicon Valley set as a whole but oh well: > The investment is largely coming from Gigafund, the VC started by ex-Founders Fund partners in 2017 originally to put more money into SpaceX, with Tandem Fund and Y Combinator (where Lambda School was incubated) also participating. Its list of other backers include GV, GGV, and Stripe. (Tommy Collison, the head of business development at Lambda, is the younger brother of the two Collison brothers who co-founded Stripe.) https://techcrunch.com/2020/08/21/lambda-school-raises-74m-for-its-virtual-coding-school-where-you-pay-tuition-only-after-you-get-a-job/ https://techcrunch.com/2020/08/21/lambda-school-raises-74m-f...
• magicmicah85 3y ago
  BloomTech about to get a name change. Honestly wonder what the true placement rate was. There seem to be some success stories I’m seeing on Twitter but this could have all been avoided had they just been up front. That $164,000 victim fund sounds pitiful but I do wonder how it is calculated.
  • kklisura 3y ago
    > ...with inflated promises of job-placement rates as high as 86 percent, when the company’s internal metrics showed placement rates closer to 50 percent and in some cases as low as 30 percent. > BloomTech advertised on its website that 71 to 86 percent of students were placed in jobs within six months of graduation, when its non-public reporting to investors consistently showed placement rates closer to 50 percent. Allred tweeted that the school achieved a 100 percent job-placement rate in one of its cohorts, and later acknowledged in a private message that the sample size was just one student.
    • magicmicah85 3y ago
      I’m such a derp, I literally read right past that, thanks.
    • wredue 3y ago
      For the record, it’s actually far worse than this even, as many of your “teachers” are just people from the previous cohort. After a slew of negative reviews came from a few people that verifiably took the early courses, lambda decided not to improve their course, but instead to do two things: 1) they gave students financial credit for posting positive reviews on social media 2) they paid review shops out of India and China to bombard the internet with fake positive experiences. This school are scumbags. Frankly I am shocked that it still exists and people still go there.
      • reaperman 3y ago
        #2 is a clear FTC violation if I'm not mistaken.
• vitalurk 3y ago
  Good to see some justice
• danso 3y ago
  pg in 2019: > Lambda School will go on growing and transform education. Few will remember having been part of the jeering mob. https://twitter.com/search?q=from%3Apaulg%20lambda&src=typed_query https://twitter.com/search?q=from%3Apaulg%20lambda&src=typed...
  • hanniabu 3y ago
    [flagged]
    • thiscatis 3y ago
      Not just pg, also the stripe founders have been fawning over Austen. They all knew it was a predatory “school” but backed it anyway.
      • sandofsky 3y ago
        Tommy Collison, their youngest brother, worked there as Head of Communications Strategy and Business Development.
      • doctorpangloss 3y ago
        While I don’t think Lambda School is good, did they actually ever collect on any students who didn’t get jobs? It seems kind of important to the premise. These things may have been loans and had a finance charge or whatever. But if you can “default” and nothing happens… what are they really?
        • sandofsky 3y ago
          The contracts in the early days lasted up to five years, so people who went on to further training (e.g. associates degree at a community college) still owed money even though Lambda School had zero role. Later, they extended it to eight years and removed the “tech job” stipulation. I read one account a guy owing money who worked as a mailman.
          • 3y ago
• thenerdhead 3y ago
  Dang I knew this guy from the Utah startup scene and always got weird vibes. Doesn’t surprise me one bit.
  • janalsncm 3y ago
    Can you say more about the weird vibes bit?
    • thenerdhead 3y ago
      I grew up in Utah which has a certain religious culture mixed in entrepreneurship. Very good salespeople but not always morally right depending on your beliefs. The broadway show “The Book of Mormon” is a good satire as to what I’m talking about. But lived experience is better. Also I knew of him and his early employees from his involvement in a bootcamp called DevMountain in Provo. Interesting concepts were applied there and their practices were very distasteful in my opinion such as having a previous cohort student teaching the upcoming cohort and inflating LinkedIn recommendations with the current classmates to land jobs. Like it isn’t wrong to do, but it isn’t right either. Following Lambda over the years showed all of these patterns to larger extents.
• imzadi 3y ago
  I attended Lambda when it was first starting out. I think I was in the third or fourth cohort. At the time, the sell was that you didn't have to pay anything unless you got a job using the skills you learned from them. I was pretty naïve, I guess. Things seemed fine in the beginning. The instructors were good, and I liked that there were actual live classes. Things degraded very quickly. They kept changing the format and the curriculum ("iterating"). They doubled the length of the program that I was in, which made it impossible for me to even finish it. I was working in a tech support job where we had to do shift bids and no shift was guaranteed. I enrolled in a plan that fit the shift I was working, and the expected end date, and when they changed the program length and format, I couldn't complete it. They promised career guidance, including having a career councilor, but I never got one. They kept telling my cohort we would get our councilors after this or that milestone, but when we got there they would move the goalpost again. The closest we got was a resume course that was not relevant to tech at all and a resume review by another student. When I had to drop out of the program, I tried to get them to cancel the ISA or reduce it, but they said I had completed "most" of the curriculum and thus was on the hook for all of the ISA. They then started billing me for it because I was working in tech, in the job I had for 6 years before I ever even started their program. I went to a lawyer and was told it wasn't worth suing, because they required arbitration in NYC, which would cost more than I would save.
  • bagels 3y ago
    Did you pay? Did they sue?
    • imzadi 3y ago
      I paid
  • neilv 3y ago
    Have you contacted the CFPB, to see whether they can help now (in light of this press release)?
    • imzadi 3y ago
• gorkemcetin 3y ago
  That is probably the end of income share agreements (ISA). If any companies are doing ISA like that, most probably they would have to collect money upfront just like other bootcamps as well.
• adam_gyroscope 3y ago
  Full link to consumer financial protection board announcement: https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-action-against-coding-boot-camp-bloomtech-and-ceo-austen-allred-for-deceiving-students-and-hiding-loan-costs/ https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes...
  • ChrisArchitect 3y ago
    Shoulda posted that if you knew there was a link
    • Jimmc414 3y ago
      That is the same link as the original post.
    • anamexis 3y ago
      You're not replying to the OP.
    • ChrisArchitect 3y ago
      (merged in comments from a dupe post)
• m3kw9 3y ago
  It was almost an open scam, how are they fined 200gs, they made like 100 mill
  • gigatexal 3y ago
    Exactly this. If the CFPB claims are true and the settlement seems to suggest that BloomTech and Austen agree … then the penalty should include clawing back at least half of that 100M no?
• tech-jabroni 3y ago
  Allred is a huge scumbag and PG was a big shill for Lambda. Don't see any mention of this from either of them Twitter, how curious
  • peanuty1 3y ago
    PG has tweeted in support of Lambda.
• londons_explore 3y ago
  > Allred tweeted that the school achieved a 100 percent job-placement rate in one of its cohorts, and later acknowledged in a private message that the sample size was just one student. A master of deception with statistics!
  • tamimio 3y ago
    Isn’t this the case with a lot of these science studies? Keep tweaking the stats and inputs to achieve the funders’ agenda..
    • anamexis 3y ago
      This wasn't a science study.
• adubashi 3y ago
  https://twitter.com/Austen/status/1573859253797810176 https://twitter.com/Austen/status/1573859253797810176 Honestly, there’s nothing really that screams dishonesty than this tweet. Saying that your outcomes are stronger than ever when every tech company was laying off and headcount was frozen just doesn’t pass the smell test.
  • Terr_ 3y ago
    > Honestly, there’s nothing really that screams dishonesty [more] than this tweet. I was puzzled for bit, but I think you may have accidentally a word.
• janalsncm 3y ago
  Didn’t know who this guy was but I followed him recently because he tweets a lot about Silicon Valley stuff. (He was suggested by Twitter.) Some of his tweets were a little, let’s say, not grounded in reality, but I’m not on Twitter to pick fights in my legal name. But I am not surprised he turned out to be a scammer.
  • deleted 3y ago
    [deleted]
• pushedx 3y ago
  The homepage is still making false claims: https://www.bloomtech.com/ https://www.bloomtech.com/
• highwayman47 3y ago
  at least before Silicon Valley scoundrels didn't pretend to be virtuous too
• gigatexal 3y ago
  Total fines are only 164k? Seems low if there are many more students with ISAs worth tens of thousands no? but didn’t get placed?
• deleted 3y ago
  [deleted]
• g-w1 3y ago
  The Recurse Center[1] is the opposite of this. They don't take any of your income, they just help you find jobs and companies pay them to find cool people. And there is no curriculum. They believe that if people work on cool things they will learn a lot. I can't recommend it enough! [1]: https://www.recurse.com/ https://www.recurse.com/
  • internetter 3y ago
    RC is not a bootcamp: https://www.recurse.com/not-a-bootcamp https://www.recurse.com/not-a-bootcamp, so it's not at all comparable to this program
    • BlackjackCF 3y ago
      Yeah I always thought RC was like a writer’s retreat… but for software.
  • noufalibrahim 3y ago
    The "no curriculum" style automatically filters for a certain kind of self learning high achieving student. This is a reasonably guarantee of success and also limits the scale of the operation. Lambda School is more of an attempt to train the average guy who wants to increase his earning ability. He doesn't have the time or patience to "work on cool things" in the hope of "learning a lot" which is loosely correlated to finding a good job. They cater to different crowds and solve somewhat different problems.
    • deleted 3y ago
      [deleted]
  • not_wyoming 3y ago
    +1 to this. I attended RC in winter of '18. It wasn't the best fit for my personal learning style, but it's an incredible program for the right person. I highly, highly recommend it to anyone considering going there. Some of the kindest and smartest people you'll meet.
• jdp23 3y ago
  Paul Graham, 2020: "Lambda School will teach you programming faster than most colleges. And it not only works well remotely, but was designed to from the start." [1] Paul Graham, 2022: "Of 1277 students who graduated from Lambda School in 2020 and sought jobs, 950 got them, for a placement rate of 74.8%. (Lambda's weirdly dedicated haters will be happy to hear that these numbers were audited by an accounting firm.)" [2] [1] https://twitter.com/paulg/status/1254809755681525762 https://twitter.com/paulg/status/1254809755681525762 [2] https://twitter.com/paulg/status/1254809755681525762 https://twitter.com/paulg/status/1254809755681525762
  • zakary 3y ago
    Having something audited by an accounting firm doesn’t make me trust the numbers much more. It’s well known that many accounting firms will give you whatever result you want as long as you pay enough
  • Atotalnoob 3y ago
    I’m sure the CFPB is taking action based on haters….
  • deleted 3y ago
    [deleted]
  • ec109685 3y ago
    The “who sought jobs” is doing a lot of work in that sentence. Need to know number of people who started program and number of people who got jobs at the end.
• ron22 3y ago
  Vincent Woo in 2020: "Lambda has claimed a 86% student placement rate for years. The real number is probably about 50%." [1] From the announcement: "BloomTech and Allred lured prospective enrollees with inflated promises of job-placement rates as high as 86 percent, when the company’s internal metrics showed placement rates closer to 50 percent and in some cases as low as 30 percent." Bravo Vincent! [1] https://twitter.com/fulligin/status/1230152732809392133 https://twitter.com/fulligin/status/1230152732809392133 [2] https://nymag.com/intelligencer/2020/02/lambda-schools-job-placement-rate-is-lower-than-claimed.html https://nymag.com/intelligencer/2020/02/lambda-schools-job-p...
  • akanet 3y ago
    Thanks
    • adroitboss 3y ago
      I remember seeing you debate Jason Calacanis from the all in podcast on this week in startups on this exact topic. You are probably one of the most confident, well spoken people I have ever heard on a podcast. You also don't derive your comfort from the people around you, so you didn't feel the need to laugh away awkward moments. It's a great watch. https://m.youtube.com/watch?v=5hUT8VZNvm8&t=3488s&pp=ygUhVGhpcyB3ZWVrIGluIHN0YXJ0dXBzIHZpbmNlbnQgd29v https://m.youtube.com/watch?v=5hUT8VZNvm8&t=3488s&pp=ygUhVGh...
• ji_zai 3y ago
  I believe the underlying cause is that the pay-to-learn model itself is not feasible because the value of a good teacher's time cannot be compensated without charging students and ridiculously high fee, and a student can't justify a high fee when the outcomes aren't guaranteed. Colleges have worked in the past because the outcomes were more or less guaranteed (i.e. if you got good grades and graduated, you would very likely land a job), but even that is no longer valid (outside of regulated domains like medicine, law, etc.). I predict we will see many, many more pay-to-learn companies, institutions fall in the coming years. ("fall" could also mean become irrelevant, and catering only to those that don't understand how the world has changed and still incorrectly think that such programs will prepare them well). BloomTech, in order to survive, had no choice but to try and play the games they did, and mislead. It's a byproduct of not having a business that is viable.
  • paulddraper 3y ago
    That, plus there is an extremely strong negative select for coding bootcamps. Your local community college could have the best program ever, but they won't beat Ivy League grads, purely because of the inputs.
    • ji_zai 3y ago
      Absolutely. Higher quality inputs actually reduces the forcing function for the education to be high quality - since you'll get good outcomes anyway.
      • fuzzfactor 3y ago
        >reduces the forcing function for the education to be high quality Not just the education, but the selection process too. If the higher-quality inputs are abundant, then the overly-exclusive selection process is somewhat deleveraging of overall potential. If the higher-quality inputs are scarce, they are outnumbered by others having average-to-below-average potential, who often seek the exclusive membership more so than any actual high-quality performance. Once again a large percentage of the highest-quality inputs can be systematically excluded in a disadvantageous way. With good fortune at least a good number of high-quality inputs do gain entrance and it can set a good example, sometimes realistic, sometimes not. Either way the higher-quality inputs are best identified beforehand, not the result of an overly exclusive selection process. But it's this type selection process that contributes so much to some institutions' perceptions of quality, when they could be doing so much more. From the least-prestigious programs all the way up to the most-prestigious, it seems like there is always going to be some temptation to blur the distinction among peers and tiers in a way that's confusing to students, and it's just a matter of integrity whether that is taken a bit too far.
• mathattack 3y ago
  He seems like someone who fell in love with the persona of being an entrepreneur rather than someone committed to their students and the work. I’m surprised they survived their first brush with the law. Can they possibly survive this? Looks like the persona is still active and in denial.
• karamiller7890 3y ago
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• jcryzu 3y ago
  The cash penalty, $164K is an insult to justice
• hackerlight 3y ago
  > Allred tweeted that the school achieved a 100 percent job-placement rate in one of its cohorts, and later acknowledged in a private message that the sample size was just one student. This is shameful behavior. And to think prominent people were propping him up after so many stories had already come out, all in the name of not cowing to the mob. They all have figurative blood on their hands, and I already know they won't be apologizing to the affected people.
  • jerrygenser 3y ago
    PG tweeted today in support, kind of: https://twitter.com/paulg/status/1780897522778554841 https://twitter.com/paulg/status/1780897522778554841
• nickzelei 3y ago
  When do the enforcements go into effect? My wife went through Lambda in 2020 and still is being hounded by them even though she does not work in a related field. Has to prove salary, show statements, etc. Does this mean she no longer will need to do this?
• VirusNewbie 3y ago
  Do they investigate public schools that engage in similar behavior???
• effingwewt 3y ago
  Oh yay! Is Allred in the comments lying as per usual? Bout damn time.
• bshanks 3y ago
  I don't understand why an Income Sharing Agreement would be classified as loans. They seem more like equity than debt; the amount that students would pay depends on their future income, and can be arbitrarily small or large (right? or maybe I am misunderstanding the terms of these agreements). I had thought that debt is when you have to pay back at least the "principal" no matter what, and equity is when the financier shares the risk of you failing. Maybe that's not correct, though? Does the definition of a "loan" include any sort of financing, even if the amount that needs to be "paid back" to the "lender" can be arbitrarily small or large? That would make equity financing a special case of debt.
  • nusl 3y ago
    You'd probably need to read the contract they make folk sign to get a real idea of why. It could be that the contract structures it like a loan.
  • inopinatus 3y ago
    You can’t hold equity in a person, because that is slavery. All consumer liabilities are thus a form of debt. The characteristics that matter most are whether it is secured, the schedule of repayment, and the schedule of fees (interest being amongst the fees). Everything else is window dressing after those three parameters, and the label you stick on the box matters the least of all. Consequently, undischarged debt is indistinguishable from a loan, which is rather the CFPB’s point. When push comes to shove, the substance of a thing matters much more than the attempt to relabel the thing.
  • beej71 3y ago
    (There was a cap on the ISA, so it wasn't arbitrarily large, but your points still stand.) I was thinking the same thing. "Can you have a loan without principal?" But reading through the documentation on this case, it seems like the legal answer is that you can.
• KnuthIsGod 3y ago
  ". The CFPB found that BloomTech and Allred falsely told students the school’s “income share” agreement contracts were not loans, when in fact the agreements were loans carrying an average finance charge of around $4,000. BloomTech and Allred lured prospective enrollees with inflated promises of job-placement rates as high as 86 percent, when the company’s internal metrics showed placement rates closer to 50 percent and in some cases as low as 30 percent. "
• sensanaty 3y ago
  If my math is correct, they scammed roughly $44M from ~11000 people... And the fine is somewhere around $150k? In what universe is that an acceptable punishment? Whoever is running the show here should be thrown to rot in jail for the next few years, not this love-tap they're getting.
  • ack_inc 3y ago
    I'd say your math is wrong. Only a small % of the 11,000 people are going to agree they were scammed.
  • Kalium 3y ago
    The fine is not the punishment. The bans are the punishment. They gut the business model, likely shutting down the business entirely in short order. Making people whole is what civil lawsuits are for. Which, if I understand correctly, will be much easier with this order and findings in place. That will be some serious financial punishment on top of the ban.
• deleted 3y ago
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• justin66 3y ago
  Unrepentant as always. We decided to settle the matter because it was clear that ongoing litigation would be extremely time consuming, incredibly expensive, and distract us from our core mission. We do so without agreeing to or denying any of the allegations in the consent order. https://twitter.com/Austen/status/1780770303406403701 https://twitter.com/Austen/status/1780770303406403701 Weird to read further down the thread, where he acknowledges the wording of the press release is legal bullshit, and then employs an entirely different set of weasel words. I can't even sum this up.
  • diyftw 3y ago
    > I can't even sum this up. As is the intent with most serial liars, no? Twist you up so bad that it quite literally jams up your reasoning ability, making you more susceptible to the con.
• de_nied 3y ago
  https://www.ycombinator.com/blog/a-cs-education-thats-free-until-you-get-a-job-austen-allred-of-lambda-school/ https://www.ycombinator.com/blog/a-cs-education-thats-free-u... YCombinator >.>
• not_wyoming 3y ago
  /Years/ ago, I tweeted something about how companies like Uber and Lambda were privatizing public services. ISAs specifically seem like a privatization of taxes. Austen Allred quote-tweeted me to his gazillion followers and caused a big pile-on about how awful and wrong and anti-progress I was. Couldn't happen to a nicer guy.
  • chamomeal 3y ago
    I’d be interested to read a post/article about the privatization of public services
• dukeyukey 3y ago
  If you look at the founder's backgrounds it makes this seem all the more likely. Before BloomTech, Austen was a develop for a payday loans company. His cofounder, Ben Nelson, worked as a software instructor, and left BloomTech in 2021. So maybe it's less surprising that the innovation here was in the financing, not the teaching.
• AlwaysRock 3y ago
  Bootcamp outcomes reports are always bullshit. I used to work at a bootcamp and spent a few days digging into popular bootcamp outcome reports. Basically they all wittle down the qualifying students per graduating cohort until they have a good number. Reasons to eliminate a student from your outcomes report: 1. Didnt finish the program 2. Didnt complete "career commitments" aka xx number of applications per week, x number of meetings with career counselors per week, responding to all emails from bootcamp within x days - for 6 months to 1+ year 3. Didnt pay tuition or missed a tuition payment 4. Had too many absences during the bootcamp 5. Received a job offer but turned it down 6. Accepted a job offer that wasnt tech related 7. Graduate just doesnt respond to outreach from bootcamp The 30%-50% actual placement rate is pretty realistic. I later went through the same bootcamp I worked for and my graduating cohort was probably 30% to 40%.
• generativeai 3y ago
  austen was one of paul g's favourite ceo
• benced 3y ago
  I don’t think the core model was crazy, you just have to actually deliver value. They didn’t and I’m glad they’re being punished for it. So many people like to do fake work instead of real work, including people who scoff at fake work.
  • peripitea 3y ago
    Yeah it's really hard in both this article and the comments to tell what was actually problematic and what wasn't. A lot of people seem to think ISAs are fundamentally problematic but none of their arguments seem compelling to me. It's not even really clear to me that they did/didn't deliver value. I'm assuming some of this is true, but hard to tell how much -- the CFPB isn't really giving sufficient details to know how much of what they're saying is true in spirit vs legally true political posturing. Regardless, I'll be cautioning anyone who asks me for bootcamp recommendations and is considering BloomTech.
• dogman144 3y ago
  Good! I was involved deeply in tech career volunteering several years back when this was called Lambda school. Writing was on the wall about Lambda even then based on student feedback from a 100+ student multi year sample size in the orgs I helped. Consistently students raised: ISAs coming to much larger payments than advertised. Constantly changing curriculum. The classic one for bootcamps - blind leading the blind with former students teaching the always changing curriculum, and juicing graduation employment stats. If I recall I even broke out the ol’ discounted cash flow math with students to actually sort out what the rate lambda was getting on these ISAs, and ya it was payday loans basically. But, we saw justification after illogical justification about this setup. Former students employed by lambda getting aggressive. otherwise pretty well-meaning groups who had vendorized tech career support partnering with Lambda, despite seeing the same feedback as I did bc the company leads were in the same groups as I was. Takeaways from all this if you or people you care about are trying to use these conduits to build a tech career and are evaluating options like Lambda vs a degree and so on: - market can stay illogical, and same with its supporters, longer than when good, clear as day data about fraudulent (or more politely “very obscure and novel pedagogy approaches”) practices surfaces to counteract that narrative. - people and orgs who have staked their future on that illogical/fraudulent market will roast their reputations in face of that evidence for much longer than you think or respect - the feedback that matters should be the primary sources: the students that since 2019 or so started pointing out all these practices in bulk. It is now 5 years later and who knows how many students who shredded their career goals by depending on schools like this.
• biaass22223353 3y ago
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• pc_edwin 3y ago
  CFPB needs to be burned to the ground. How tf is this even constitutionally legal? It doesn't matter what your political leanings are or what you think about the matter at hand. No agency should have the much power to be the judge jury and executioner. Oh and also to just write laws at a whim. This is really not cool. I have no idea how anybody who calls them selves an American can be cool with this.
• lowercased 3y ago
  YEARS ago (2002? 2003?) I'd done some tech training courses in my town. "Learn web dev" kinda stuff. Was very much a part time thing, but I'd looked in to "hrm... could I make this a business?". And learned about the numbers... and learned about ISAs. If I could get accredited(?) as a certain type of school, I could deal with ISAs with students. I kept looking at the numbers, and couldn't find a way to make this be ... profitable. The time it would take for competent professionals to spend adequate time with folks wasn't something most people could really afford. So... either get them to take out loans, or do an ISA. Neither of those seemed to make sense for the types of students who might most need this, and... it just left a bad taste in my mouth. I enjoyed the teaching part, but couldn't find a way to make it a good business. Then years later I started seeing all these bootcamps charging thousands and thousands for what seemed to be garbage (mostly). Left another bad taste in my mouth.
• game_the0ry 3y ago
  Man, I have so much to say about this...where do I even begin. I attended a bootcamp myself (hack reactor). My experience overall was very good and I owe my (6 figure) income and current career to it - the students and instructors were both impressive. I was in a dead end career and now I have a new world opportunity opened up to me. But that being said... I think a couple of things killed the bootcamp model: - Saturation. Insatiable student demand + no acceptance criteria (anyone can get in) means there is robust market for bootcamps. Hack Reactor (and a few others, like Fullstack Academy and App Academy) mitigated this somewhat bc you needed to pass a (difficult) interview to get accepted. - Fraud. Bc there is no "accreditation" so anyone could star a bootcamp, including scumbags. So I have mixed feelings. Hopefully, the (terrible) job market will flush out some of the shit down the toilette, but I hate that innocents, people just trying to improve themselves, got caught up in the blast radius.
• fakeart 3y ago
  Don’t try to disrupt higher ed. They are the federal government for all intents and purposes. You will be the one who gets disrupted.
• jerrygenser 3y ago
  YC backed company: https://www.ycombinator.com/companies/bloom-institute-of-technology https://www.ycombinator.com/companies/bloom-institute-of-tec...
• kara4151 3y ago
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• kara6969 3y ago
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