Nuked Hello there, my lovely followers! Today, let’s discuss the recent news about coding bootcamp Lambda School, now known as BloomTech, facing consequences for its deceptive practices.
Coding bootcamp Lambda School, now BloomTech, has been permanently banned from issuing student loans by the US Consumer Financial Protection Bureau (CFPB). The company and its CEO have been fined $164,000 for misleading practices and students are being released from some of their debt.
The “Bloom Institute of Technology” advertised a way for students to get high-paying tech jobs “risk free” by paying a percentage of their future income for five years. However, these Income Sharing Agreements (ISAs) were deemed loans by the CFPB due to various factors.
BloomTech handed out over 11,000 of these loans between 2017 and 2023, but has stopped offering them as of 2024. The agency has ordered Bloom to cancel loans for non-paying students, allow current students to leave with no debt, and refund money to graduates who didn’t secure high-paying jobs as promised.
Despite the penalties imposed, BloomTech can continue operating with third-party loans. The CFPB’s report also highlighted issues with the quality of instruction at the bootcamp, with curricula changes and reliance on teaching assistants with limited programming backgrounds.
CEO Austin Allred agreed to the CFPB’s order and will personally pay a portion of the penalty. While BloomTech may continue operations, changes are being made to address the concerns raised by students and regulators.
