This is similar to when you fought with the BPPE for a year because they insisted you can't operate in California while offering ISAs. After you finally gave up the fight, and agreed to not offer ISAs, they approved you. You said:
> Their approval is a huge testament to our team and our students, as well as an official endorsement of our all-remote, career-focused educational model.
The BPPE does not endorse schools. They simply said you were no longer operating illegally.
Honestly, the California website claims this was "deceptive" but to me that seems like an exaggeration. Lambda claimed this thing wasn't dischargeable in bankruptcy, the state of California says actually it is. Okay, fine. It doesn't mean Lambda was doing something malicious. It's not like California makes it extremely transparent and clear what the rules are for starting a new sort of educational financing. When you do something new that's covered unclearly by California regulations it is no surprise to have this sort of issue.
To me the real injustice is that California does not allow ISAs. Students are not idiots incapable of making deals for themselves, and the big ripoff in education right now isn't ISAs at coding schools, it's taking out a regular student loan to get a worthless degree at a mediocre university. All of this argument about "catching Lambda's deception" is a distraction from the real problems with education.
Maybe I'm missing something, but if someone were in the unfortunate position to be considering bankruptcy, wouldn't knowing whether this loan is actually dischargeable or not be a big deal to them? It seems like it would be.
I really don't get why some people dislike ISAs. They're way better than student loans.
(1) The “Income share agreement” is a $30K loan with various wrinkles,
(2) Lambda School, for legal reasons, doesn’t use ISAs in California, but a somewhat less obfuscated $30,000 loan, the “Retail Installment Contract”.
> I really don't get why some people dislike ISAs. They're way better than student loans.
They aren’t better than federal student loans, which have an optional income driven repayment plans, which are a similar or lower percentage of discretionary income than most ISAs are of total income.
They may sometimes be better than the available nonfederal loans for people attending institutions not qualified for federal loans, but that’s a pretty low bar.
Are you seriously arguing that it is plausible that Lambda School has a good faith mistaken belief that they were qualified to participate in federal Title IV financial aid, but somehow made no mention or use of that qualification other than falsely claiming debts to the school were “qualified education loans” with limited dischargeability in bankruptcy?
Or are you claiming that it is not obvious that Title IV financial aid eligibility is a requirement for loans for a school to be qualified education loans?
That...strains credulity.
> "Lambda made a false statement about the California law"
Actually they broke California law by making a false statement of federal law. (“qualified education loan” is a federal-law category that determines both if the loan qualifies for the student loan interest deduction and if it has the “undue-hardship-only” discharge rule im bankruptcy.)
ISAs seem a lot closer to "student loans" than, like, a new boat. I don't think this is totally unreasonable.
The rules are federal, and its very clear that the requirements for a loan to be qualified education loan (which gets tax deductible interest and protection from easy discharge) include that it must be used solely for costs of education at an institution eligible for Title IV financial aid under federal law.
This is not something it is plausible someone running a business in the space would make an honest mistake about, it is a targeted deception to discourage debtors from seeking available bankruptcy relief, leveraging the fact that lying to discourage people from such relief for existing debt, unlike lying to induce purchases, is not usually prosecutable as fraud.
Really, its standard corporate spin when accepting a settlement, “We’re super happy to work with regulators to make things better.” When, of course, if the company had any interest in making things better the regulator would never have needed to get involved in the first place.
Obviously, its deceptive, but its not bizarre, its just making PR lemonade out of PR lemons.
I'm still getting up to date on what happened here, but corporate malfeasance isn't incompatible with aggressive and even corrupt regulation. In fact my starting place is that both are likely.
What I reject is the claim that the State only steps in and takes action if the party they're investigating has done something wrong. That's absurd.
Since nothing in the comment you are responding to implies, or even has anything to do with, that, I’m not sure, other than love of pure non-sequitur, you would post that.
Kind of precludes alternate motives, like "the regulator is captured by existing interests and is prosecuting the company despite the company's sincere intention to make things better".
This is ridiculous oversimplification. Can you elaborate at all on how the company has "no interest in making things better"? It's an interesting attack on the 'character' of a corporate entity, that's almost impossible to disprove.
You should be asking why every school loan is not dischargeable in bankruptcy.
makes your arguments seem a little less credible since you clearly have a bone to pick but like I said, I don't know anything about lambda school. maybe you're justified, idk.
>You were caught putting deceptive language in your contracts.
I'm curious if there's a way you can mess up language in a contract that isn't deceptive/misleading?
>You're on probation. This is nothing to be excited about
This is standard procedure, but you're clearly painting it as if they've been knocked down another peg.
>The BPPE does not endorse schools. They simply said you were no longer operating illegally.
And this is blatantly false and makes me further question everything else you've stated.
https://www.bppe.ca.gov/schools/approved_schools.shtml
Try the search function.
According to the linked document, this was not a typo. This line contradicts reality: "this extension of credit is a qualified educational loan and is subject to the limitations on dischargeability in bankruptcy contained in Section 523(a)(8) of the United States Bankruptcy Code."
In addition, the document points out, "Certain Lambda School marketing has included representations implying its program is “free.”" It is not free.
> This is standard procedure, but you're clearly painting it as if they've been knocked down another peg.
The parent post made it sound like they were out of the woods, when they clearly aren't. If I were the subject of this press release, I would not be "excited."
> And this is blatantly false and makes me further question everything else you've stated.
I did not say they were still operating illegally. I said that they used the word endorsement, when the state had simply approved them. The two words mean different things.
> Try the search function.
I searched for the word "endorse" on that page, and found zero matches.
This in no way answered my question.
>In addition, the document points out, "Certain Lambda School marketing has included representations implying its program is “free.”" It is not free.
Interesting and not related to the contract, we're talking about marketing. I find your comments extremely disingenuous, you're switching contexts of "misleading" in the very separate domains of marketing and legal contracts which should be too obvious.
The order is non-specific, so what do you want to get into? "Free until you get a job" comes to mind, is that misleading? I'll argue it's true, given that you don't pay them money when you don't have a job.
>The parent post made it sound like they were out of the woods, when they clearly aren't. If I were the subject of this press release, I would not be "excited."
It's certainly a step forward in my opinion, and you seem to take issue with the fact that it wasn't a flawless approval. Fair enough, your opinion is noted.
>Approval is very different than endorsement.
This seems like doubling down on a total misrepresentation.
Austen clearly said approval, then elaborated to claim it was an endorsement of their relatively unique education model. You don't need to be that generous to imagine that 'approval' by a body (which only approves or does not) of a new/innovative model is something of an endorsement of this new model.
You picked out endorsement, and responded as if he had said "BPPE endorsed our program". It's clearly not what he said.
Austen even appears to have removed the egregious line, which I imagine makes sense from a PR standpoint as people will try to misrepresent it as you have.
I can't believe I have to make this explicit, but ok.
> I'm curious if there's a way you can mess up language in a contract that isn't deceptive/misleading?
Reading the contract, a student will think that they can't discharge the debt through bankruptcy. In reality, yes, they can discharge the debt through bankruptcy. It's right there in the order:
"The Bankruptcy Non-Dischargeability Provision is misleading because, contrary to the Dischargeability Provision, the Contract is not a “qualified educational loan,” as defined in section 221, subdivision (d)(1), of the Internal Revenue Code of 1986, and is not subject to the limitations on dischargeability pursuant to section 523, subdivision (a)(8), of the United States Bankruptcy Code."
A 'mess up' would be misuse of an Oxford comma. You don't 'mess up' dropping a very specific reference to a very specific legal code that does not apply.
> Interesting and not related to the contract, we're talking about marketing. I find your comments extremely disingenuous, you're switching contexts of "misleading" in the very separate domains of marketing and legal contracts which should be too obvious.
The order cites their deceptive marketing. Presumably that's why they were ordered to review all of their previous marketing.
> The order is non-specific, so what do you want to get into?
I copied and pasted directly from the order.
> You picked out endorsement, and responded as if he had said "BPPE endorsed our program". It's clearly not what he said.
I copied and pasted from his own post.
Since we can't reach common ground on basic facts, I see no reason to engage with you any further.
I'm sorry, do you feel I'm not being generous in my interpretation? I certainly feel you're not, is that not a guideline here?
>I can't believe I have to make this explicit, but ok.
You don't have to, you misunderstood me. If a contract is flawed, is there a result other than 'misleading'?
Do we expect all contracts to be flawless 100% of the time? Are all of the flaws deliberate?
> You were caught putting deceptive language in your contracts.
So I'll try to be generous, I read this as you accusing him of deliberately misleading people. You assert that this cannot be a 'mess up'. Am I wrong?
> I copied and pasted directly from the order.
I'm asking if there's marketing material you'd like to point out and discuss. I quoted some, do you not want to engage on that?
>I copied and pasted from his own post.
Which I explained, he explicitly stated approval, and then at worst, embellished upon it.
Is there no overlap between "approval" and "endorsement" that ever warrants the statement he made?
> Since we can't reach common ground on basic facts, I see no reason to engage with you any further.
You're extremely adversarial, yet I'm unsurprised you want to withdraw.
> You don't have to, you misunderstood me. If a contract is flawed, is there a result other than 'misleading'?
Or from further up
> I'm curious if there's a way you can mess up language in a contract that isn't deceptive/misleading?
Of course there is. Especially if you don't conflate misleading and deceptive, because they certainly don't mean the same thing. Not every statement in a contract that might turns out to be against the law was made to deceive one party. And that's so obvious that your question is nothing else but distraction from the situation at hand.
A contract can have clauses made in good will in the interest of both parties that turn out to be against the law. E.g. in my country copyright is absolutely nontransferable, but of course I wanna transfer the usage rights for paid work. If the contract would say my copyright is transferred rather than me transferring usage rights it's certainly wrong and against the law, but it's neither misleading nor deceptive of the intent behind the clause.
> You are ignoring the evidence presented, ask open questions beside the point and attack him personally. That's not a way to have a discussion and it feels like you're acting on an agenda.
Where have I attacked him? Telling him I think he misunderstood me is attacking? Seriously?
To go over my initial contention here,
Austen's original statement:
"Their approval is a huge testament to our team and our students, as well as an official endorsement of our all-remote, career-focused educational model."
The user's response:
"The BPPE does not endorse schools. They simply said you were no longer operating illegally."
So, Austen clearly said approval, and then I would argue embellished it at worst, and I would further argue it's not unreasonable. "Approval" and "Endorsement" are literally synonyms.
Beyond that, the BPPE doesn't endorse schools, but it clearly does approve them.
Does the user's response seem a generous interpretation to you at all? Or should it not be?
> A contract can have clauses made in good will in the interest of both parties that turn out to be against the law. E.g. in my country copyright is absolutely nontransferable, but of course I wanna transfer the usage rights for paid work. If the contract would say my copyright is transferred rather than me transferring usage rights it's certainly wrong and against the law, but it's neither misleading nor deceptive of the intent behind the clause.
This is actually an answer to my question which the other user never addressed. How does this constitute me attacking him? Do I seem too ignorant to warrant an answer...?
At this point I feel I'm simply being high roaded. The other user clearly ignored or misunderstood many of my questions, and I'm not attacking him for acting in bad faith the way you're attacking me. If you'd like to address any other specific points I'm happy to continue discussion.
edit: spelling/grammar
Also, it looks like you get out of Lambda School debts via bankruptcy, which you don't with regular college, so that's... an improvement?
There are options other than being weirdly positive and ranting. They could not say anything at all. They could give one of several varieties of mea culpa. They could simply state their intentions going forward.
Apologize.
> Also, it looks like you get out of Lambda School debts via bankruptcy, which you don't with regular college, so that's... an improvement?
"You can't discharge student debt," is actually a myth. I have two relatives that discharged their loans due to financial hardship. It isn't trivial, but there's a process.
The issue with ISAs, in their current form, is the lack of legal framework. Short of bankruptcy, the best you can do is lawyer up. Lambda School targets people who can't afford lawyers.
What specific issues do you have with the ISA?
That was always the case, Lambda School just communicated otherwise to students.
But if you lie about it, then...
During the middle of my enrollment at the program (Sept 2020), the school suddenly dropped all notion of grading, code review, and attendance, let alone the length of the program. It remained this way for 3 months, 50% of the length of the program.
This is a broad description of the changes, but I want to emphasize that the changes were terrible, _many_ students complained, and the school essentially whistled with fingers in their ears.
In the meantime I have a part time job and working through the MIT Computer Science OCW
That said, I’ve read through your profile and you’re a heck of a good writer. You likely don’t need any help and you’re going to do very well for yourself!! :)
Previously -> if you go bankrupt you still owe us.
Now -> if you go bankrupt you don't owe us.
On the face of it this seems like it would make Lambda school _more_ attractive than less.
Note, the clause in question is "qualified educational loan…subject to the limitations on dischargeability contained in…the United States Bankruptcy Code."
The ISAs are, as far as I know, capped at 30k, and only apply if you're making 50k/yr. I can't imagine a situation where someone's decision of whether or not to declare bankrupcy comes down to the 30k-max ISA; either it's the majority of your debt, and you're making >50k/yr, or it's a small amount relative to your other debt, in which case you should proceed anyways.
One of the biggest reasons student loans can't be forgiven in bankruptcy is because, after school, chances are the graduate has zero assets and can go bankrupt with the only downside being destroying their credit for 7 years. Whether or not you think this is justified or fair is up to you, but the situation before this ruling simply [de-]elevated Lambda School to the same playing field as other educational institutions - the only difference being that those institutions don't offer student loans themselves.
It’s exactly this. Lambda School customers tend to be young and financially ignorant, with very few resources. If a graduate is in a position where, say, they can’t find a software job, they could be functionally bankrupt, and their dwindling income/savings will still be going towards outstanding Lambda School payments.
From this perspective, it’s extremely shitty for LS to deceive students that they would have to make the payments, with no legal options, even if they were stressed about rent and groceries.
Technically sure. On the face it tells me something about their branding - that their offering may be more deceptive than I might realize. Especially since its a new economic model for education, the customer probably hasn't thought through everything, so trust is important here.
It in no way resembles the college financing model, and in fact the purpose was to succeed in precisely the way it does not.
He might not be entirely wrong. They're still not going to sell any to the general public, though, especially if it is carcinogenic.
https://en.wikipedia.org/wiki/Microwave#Health_effects:~:tex...
I've flagged comments on both sides of this flamewar. If I haven't gone further, that's because I don't want to give rise to howls of protest about moderating HN to somehow benefit YC companies. Moderating less in such cases is literally the first thing pg taught me about moderating HN: https://hn.algolia.com/?dateRange=all&page=0&prefix=false&qu...
I understand what it feels like to be an embattled minority in a forum thread, but if you represent your community the way you've been doing here, you're actually hurting it, which is a bad trade to make for the momentary relief of venting frustration. I don't disagree with you about the underlying points. But as I tell startups all the time (YC and others) the important thing is always the silent audience. To the extent that there are undecided readers weighing arguments, you're giving them additional reasons to disagree with your position, which (again) doesn't help. https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor...
Edit: nevermind, they did Google him.
Like does Lambda not have access to Wilson Sonsini lawyers like the rest of their cohort? Or more plausibly, are they just willfully ignorant towards wanting to make sure they play by every rule (e.g. hire lawyers) that comes into their chosen market? Move fast and break things am I right?
I don't describe myself as a "growth hacker" anywhere that I'm aware of.
> don't be surprised when a bunch of aspiring hackers/techies get annoyed when they see people who do bend the rules to their gain (financial or otherwise) despite having access to the worlds most prominent investors (read -> resources) and seemingly don't do their homework.
Not everything is so black and white. What is more likely is that some lawyer gave an opinion that Lambda School's offering could be interpreted as an educational loan and qualify as such (pretty clearly actually, given that the contract was written by a lawyer), and maybe even said that if they got sued here the remedy would likely be to just clarify the definition.
> Like does Lambda not have access to Wilson Sonsini lawyers like the rest of their cohort?
YC has in-house legal counsel now, and Lambda is an old enough company to have their own counsel. In any case, obviously a lawyer wrote the contract and gave an opinion that doesn't agree with your own expert legal opinion.
> Move fast and break things am I right?
Hopefully! We need a lot more of that in the world. More Zuckerbergs, more Travis Kalaniks. The more the better.
Sorry, growth consultant. Maybe it's fair to say the two are interchangeable, maybe not. I'd at least assume the same when someone uses the word growth instead of revenue/sales/marketing. Might help to not pontificate about what the term "growth hacking" is if you don't want to be associated with it: https://jamiequint.substack.com/p/growth-hacking-a-primer
> In any case, obviously a lawyer wrote the contract and gave an opinion that doesn't agree with your own expert legal opinion.
Where did I give my legal opinion? The fact is they had to settle to "undergo a review of its marketing materials to ensure that the information is accurate". This case wasn't about some doubt about legalese, but rather about how they presented themselves, hence the word "deception". It doesn't take a lawyer to know what that word means.
> More Zuckerbergs, more Travis Kalaniks. The more the better.
I think you'll understand why people are being critical of you now.
> Lambda's model that they're understandably excited about here
You seemingly imply their bizarre positivity to being forced to stop their deceptive practices is a merely a result of them being excited about their model.
How does that track at all? What does one have to do with the other?
And on top of all that, you started by calling a critical response to their extreme positivity in the face of regulation for deceptive business practices "bizarre grumpishness."
But that makes this response confusing — I was hoping to see a refutation of the regulator's claims or, failing that, a thoughtful discussion on what went wrong.
Is the regulator accurate? If so, were the statements significant? If so, what happened?
gigglesnort
ie Was anyone harmed, or is this just preventative? Seems like the latter, but just want to make it clear for people.
Was it previously a gray zone on the dischargeability? Did something change in the law? Was Lambda just being cautious in saying it ::may not:: be dischargeable? Something else?
I remember hearing that ISA case law isn't very deep, so I can imagine that there may be more gray zones.
Pretty excited to reach settlement on this one. The DFPI is a new regulatory agency in California that was tasked with reviewing Lambda School’s new incentive-aligned tuition (https://lambdaschool.com/tuition/tuition-options) in California. They came back requesting that we update a bankruptcy provision in the agreement to clarify that these agreements are dischargeable in bankruptcy, and to do a review of our marketing to make that clear. All things we’re happy to do, and always happy to work with regulators!