Feds Hit Coding Boot Camp With Big Fine For Allegedly Conning Students 39
The US Consumer Financial Protection Bureau (CFPB) has slapped coding boot camp BloomTech -- formerly known as Lambda School -- with several punishments for alleged deceptive business practices. From a report: The business, which claims on its site it will help students land their "dream job" in tech at companies like Amazon, Cisco, and Google, accepted the consent order without admitting or denying any wrongdoing. In an announcement yesterday, the CFPB said it had taken action against BloomTech and its CEO Austen Allred for allegedly not disclosing the true cost of its loans to students and allegedly claiming overoptimistic hiring rates for BloomTech graduates. BloomTech, formerly Lambda School, has operated since 2017 and offers six- to nine-month vocational programs in science and engineering, with a focus on computer technology.
"BloomTech and its CEO sought to drive students toward income share loans that were marketed as risk-free, but in fact carried significant finance charges and many of the same risks as other credit products," said Rohit Chopra, director of the CFPB. With income share loans or income share agreements, BloomTech allowed students to pay tuition later but in exchange had to pay a percentage of their future income, CFPB claimed. The agency alleged that BloomTech explicitly told students that its income share loans (which cost an average of $4k "finance charge" to use) weren't actually loans at all. The CFPB claimed in the settlement order a "significant majority" of students used these loans to finance their education, and alleged each student could end up paying up to $30k of their income to BloomTech to settle the loans. From the CFPB's press release: 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.
"BloomTech and its CEO sought to drive students toward income share loans that were marketed as risk-free, but in fact carried significant finance charges and many of the same risks as other credit products," said Rohit Chopra, director of the CFPB. With income share loans or income share agreements, BloomTech allowed students to pay tuition later but in exchange had to pay a percentage of their future income, CFPB claimed. The agency alleged that BloomTech explicitly told students that its income share loans (which cost an average of $4k "finance charge" to use) weren't actually loans at all. The CFPB claimed in the settlement order a "significant majority" of students used these loans to finance their education, and alleged each student could end up paying up to $30k of their income to BloomTech to settle the loans. From the CFPB's press release: 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.
how does an six- to nine-month school cost 30K? (Score:2)
how does an six- to nine-month school cost 30K?
now an full collage can cost more and the loans are harder to get out of.
Re:how does an six- to nine-month school cost 30K? (Score:5, Informative)
Read that part again. It's not that the school costs that much, it's that the finance charges on these "loans" could pile up over time. Just like any loan which isn't paid off and interest continues to accrue.
Why do you think so many people owe more on their student/medical loan than the original value of the loan? They didn't pay enough of it off fast enough so the interest kept adding to their total loan cost.
If you're going to a real school (Score:5, Interesting)
But at these diploma mills the loans are super shady, so I doubt it applies unless the CFPB gets involved like they did here.
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They didn't pay enough of it off fast enough so the interest kept adding to their total loan cost.
Yes.. this is a travesty.
Consumers in the US should have loan relief. Not student loan relief, but general loan relief.
It's fair that people should have to pay interest for the service of borrowing money, But interest on interest, or
this notion of a "compounding loans", ought to be severely restricted to prevent Usury and insane exploitation of students.
I would suggest a federal cap on the total annual finan
Re:how does an six- to nine-month school cost 30K? (Score:4, Interesting)
Consumers in the US should have loan relief. Not student loan relief, but general loan relief.
Republicans are big on quoting their bible and saying we should follow it, let's go with Deuteronomy 15:1-2:
At the end of every seven years you shall grant a release. And this is the manner of the release: every creditor shall release what he has lent to his neighbor. He shall not exact it of his neighbor, his brother, because the Lord's release has been proclaimed.
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inflation compondsand as part of the interrest ( but obly part of it) is compensation for inflation
No.. Interest is not "inflation compensation". Any depreciation of the value of dollars from the lender's perspective has to be made up for from their standard profits just like any other business. The Prime rate is always greater than inflation. I would say lenders should be able to be compensated for Inflation on the original loan balance but NOT be compensated for Inflation on their Additional pr
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Private schools often cost that much or more. It's why Catholic private schools are an extremely popular option because their costs are usually 1/10th of what a normal private school costs.
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Private schools often cost that much or more. It's why Catholic private schools are an extremely popular option because their costs are usually 1/10th of what a normal private school costs.
They _charge_ for the opportunity to indoctrinate your kids?
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Yes. Teaching your children the truth, i.e. "the stove is hot," is far more compassionate than letting them get burned. In the United States, the public schools in the past taught racism against black people, now teach racism against white people; both of which are an anathema to anyone belonging to a worldwide church of multiple ethnicities and cultures.
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You are glossing over a massive amount of drawbacks there. Are you a theist fuckup?
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student loans should be allowed at all unless thei (Score:2)
student loans should be allowed at all unless their lots of rules and the schools need to take an hit for not teaching job skills.
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the schools also need to take an hit when the loan (Score:2)
the schools also need to take an hit when the loans are in bankruptcy as well.
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We did exactly that (Score:5, Insightful)
I suspect in Biden's second term he'll do the same thing, but right now it would be too risky to spend that political capital, just like it was under Obama.
student loans should have an max interest rates. T (Score:2, Insightful)
student loans should have an max interest rates. That are very low and have an max fee over the base they can go to.
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Or not at all. Here in Australia we have a system called HECS (or at least that was its name when I did it in the 90s). The idea is the govt covers your fees with a loan that you pay off via a slightly higher tax rate once your income goes over a certain level. When I did it there was no interest rate associated, but after I graduated a new conservative govt got in and changed it to market interest rates. I'm *still* paying the damn thing off, and I just found out that despite being down to the last $500 ow
Cookie-Cutters (Score:2)
When I was a high school teacher these were known as cookie-cutter schools and we warned students away from them. Costly, many promises, full of shit.
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Seems about accurate.
Ya, but (Score:2)
The business, which claims on its site it will help students land their "dream job" in tech at companies like Amazon, Cisco, and Google, ...
Con or not, some of this is on the students. I mean, those companies aren't really known for hiring people with only a few months of coding training and a half-year Web/VoTech degree. That said, taking advantage of their gullibility and/or desperation isn't cool.
months of coding training and a half-year Web/VoT (Score:2)
months of coding training and a half-year Web/VoTech degree can tech more then an 4 year theory loaded school.
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Tools (Score:2)
Yep, it will teach you to code using one or two languages and a couple of frameworks. You'll be great at those. Not so much anything else.
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Given that frameworks sometimes have a pretty short lifetime and languages go out of fashion....
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months of coding training and a half-year Web/VoTech degree can tech more then an 4 year theory loaded school.
Except for the theory parts, which can come in handy if you want to get past being just a code monkey. There's also plenty of coding done during a 4-year degree program -- at least there was in mine. And I was a grader. My OS class had us simulate an interactive operating system and another class had us write a functional linking loader, both in C. (my concentration, back in the mid '80s, was operating systems design) I also took classes using LISP, Pascal and x86 assembly (on new PCs as the printer f
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That's not a degree, that's what Microsoft calls a "certificate".
If you don't understand data structures, you can't really do programming.
If you're not good in Algebra, you can't do programming. Programming IS Algebra.
This symbol represents something else, is something that vanishingly few people can grasp.
Following recipes without understanding what it means is what these people learn.
Sorry pal, people with zero fundamental skills and understanding will never produce a masterpiec
ITT Tech and Corinthian College! (Score:3)
Did we learn nothing from ITT Tech and Corinthian College?
https://en.wikipedia.org/wiki/... [wikipedia.org]
https://en.wikipedia.org/wiki/... [wikipedia.org]
Talent is real (Score:4, Insightful)
It takes a special kind of mind to be good at programming and not everyone can do it
Even with talent, it takes years and a LOT of work
A very short "boot camp" might be useful for someone who was curious and wanted to learn the basics for fun
Problem is, they are advertised as a way to get a high paying job
This is a scam
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Credentialism doesn't help. At one time, those with the right kind of mind tended to learn on a C64, Atari, or perhaps an Apple][ and then got a job. Before that, interested people took an aptitude test and got on the job training.
Now HR is all about the degree and some keywords.
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I agree to all of that. For some reason, many people see programming as something an average janitor can do. Not so. Programming is full-custom engineering in a dynamic, complex and evolving field. To be good at it takes a lot of education, talent and experience.
The Horror! The Horror! (Score:1)
Study (Score:1)