It makes it quite clear. The loan has always been dischargeable in bankruptcy. However, they had a provision in their contract stating otherwise, which was deceptive.
This does seem to violate the spirit of bankruptcy law as well as basic economics (presumably student loans consist of and are repaid with the same dollars that are used for other loans or unsecured debt) and has almost certainly helped universities raise tuition with impunity for decades while student loan debt has ballooned to more than $1T in the US.
[0] https://en.wikipedia.org/wiki/Bankruptcy_Abuse_Prevention_an...
Yeah, it's pretty hard to do. You have to have an "adversarial proceeding" (i.e. a lawyer from the Department of Education or whoever shows up and argues against you).
You're allowed to say who it is - in fact, I think you should say who it is, reward quality and hard work!
Also, you might mention who does the ranking (possibly more important).
To me the idea that in a 'free country' today you cannot clear your debts through bancrupcy sounds crazy, it's a practice that belongs in history books along with debtor prisons, bondage, endentured servitude, feudalism, having public holiday 'execution day' and slavery.
In the UK we used execute people for vagrancy.
Federal is less of a loan, but more a subsidy that you have to repay at later date if you can. There is no market mechanism involved, government sets the terms and rules. Overall if you have your shit together(push paperwork on time), it is nearly impossible to default on that type of a loan. So for all intense and purposes, those loans are just another hidden tax.
The benefits of this system is arguable, but for America where people hate to pay taxes and government needs to put people through college, this is not a bad option.
But... There are two massive problems in the system, private loans and the way colleges charge for education. First a lot of colleges are free to set fees any way they like, as a result in many cases federal loans are not enough and people are forced to take private loans. The problem with private loans, that they are completely market driven(higher, fees, higher costs, depends on your assets etc), but you can't get rid off them via bankruptcy which is absolutely nuts.
Overall the whole system regardless of country is very unfair and regressive in nature(poor people pay more then rich) and represents an example of broken social contract between government and its citizens. As student debt skyrockets, it also impacts the broader economy and forces people to go into debt to pay day to day expenses.
But maybe it is all by design. It is much easier to control people if they are in debt very early on in live vs debt free.
Even from the mustache-twirling evil perspective, it doesn't make a lot of sense to burden people with debt before they have even started to earn money to repay it.
being 'that guy' and pointing out that it's not:
> intense and purposes
but 'intents and purposes'.
a common eggcorn.
Of course this argument was an excuse to inflate education prices and make lenders more interest as well.
(a) is arguably not really true anymore (given some graduates are paying 5% interest), but (b) is even more true now than it was under the old (Plan 1) scheme because the salary threshold is now £27,295 (compared to the old one of £19,985).
Even now, the cost for something like a medical degree is negligible compared to the USA where $400K for medical school and undergraduate is not unheard of. (A medical degree is an undergraduate degree in the UK)
That's the point, I believe. Lambda School was pretending their loans were protected from bankruptcy proceedings so students wouldn't consider it.
It's somewhat common for corporations to pretend that laws don't exist. Even if only half of the customers believe them and don't sue, they'll save money.
Do you have any personal experience of their deception or lack of quality?
I see this brought up quite a bit, and I don't really see the issue. They are offering their graduates jobs, so why should these jobs not count just like any other jobs?
In other words it looks like a pyramid scheme if the grads only get jobs as teachers.
From what I understand, teaching is generally seen as a positive signal (if the boot camp is a good one), because it means they know the material well enough to teach it.
I can totally imagine the opposite becoming true (teaching is a negative signal), creating a positive feedback loop in the opposite direction, and turning the boot camp into a pyramid scheme.
I guess it all depends on the credibility of the boot camp, kind of analogous to universities, as a sibling commenter points out.
"Congrats on getting into the program, you're now adjunct faculty, the class you're teaching starts at 930am Monday."
5 years later maybe they have a piece of paper and maybe that impacts their job prospects.
It is definitely important to note that that these loans can be discharged in bankruptcy. But as far as I know, isn't this less stringent than typical student loans, which can't be discharged in bankruptcy? Is the point here that there was a population of Lambda students who weren't aware they could discharge their loan, and this contract prevision was preventing them from doing so? Or was the school deliberately making that process more difficult? The article makes none of that entirely clear.
On the whole this doesn't scream "deceptive educational financing practices" to me. That sounds like a government agency press release making a mountain out of a molehill and trying to knock Lambda down a peg, but I might be wrong.
Edit: after reading how dischargeability impacts people's ability to take out the loan in the first place, yeah, this matters quite a bit, and I was wrong because I didn't understand how education financing works. I'll own that. Seems Lambda was being less than equitable in how they approached the matter, and hoping no one would notice.