[michaelbuckbee]

I'd agree with you except that in this case it seems like the "deception" was actually working against Lambda school.

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."

[marcinzm]

It's not about being attractive, it's about ex-students not declaring bankruptcy because they think it won't remove their lambda school loans. Thus lambda school keeps getting money from them instead of getting nothing after they decide to declare bankruptcy. That clause was, in my eyes, clearly designed to discourage students from exercising their ability to clear debts via bankruptcy.

[nrmitchi]

I've seen this point made elsewhere too, but I'm not sure I understand it.

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.

[pseudalopex]

Or you're making less but think you could make more eventually.

[narwally]

Yep, it's about "Human Capital: The Last Unoptimized Asset Class" <- the title of an actual internal memo they wrote.

[ghufran_syed]

what’s wrong with that? is it better that people can’t develop their human capital, or is it better if people have a variety of ways to finance education to develop their human capital? The status quo is government student loans to finance education, which are generally NOT dischargeable in bankruptcy, AND must still be paid even if if you didn’t graduate, or get a good job afterwards? Isn’t the income-share agreement at least “less bad”? I’d be interested to hear your thoughts on how better to address the problem? If the government was involved, I personally think the best way would be a graduate tax of x%

[judge2020]

Maybe more attractive, but only in the 'defraud them by going bankrupt after getting the certification' sense, where they educate the students without getting paid in some cases.

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.

[anchpop]

I wonder if the accusation is that they were trying to mislead people into not understanding that bankruptcy is an option, in the hope that they’ll be less likely to default? Still doesn’t really seem that serious to me. Nobody who was under the impression that the loans could not be discharged by bankruptcy will be disappointed to find out that they can.

[nicklecompte]

> they were trying to mislead people into not understanding that bankruptcy is an option

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.

[spullara]

You don't have to pay if you don't have a job so I don't think this comment is correct.

[tims33]

I'm sure the previous terms made the loans much more attractive to lenders which is helpful to Lambda. It would be most useful to understand who created the terms in the first place.

[mbesto]

> On the face of it this seems like it would make Lambda school _more_ attractive than less.

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.