An anonymous reader quotes the Verge: In December, online coding bootcamp Lambda School quietly partnered with Edly, a digital marketplace that helps schools sell income-sharing agreements (ISAs) to accredited investors. The arrangement allows Lambda to receive money from the ISAs upfront, rather than waiting for students to find jobs. But it also flies in the face of the values Lambda typically espouses: namely, that ISAs align its incentives with the goals and aspirations of the students...
Lambda's ISAs promise an alternative to traditional student loans by allowing students to defer tuition until they've landed a job that pays $50,000 a year or more. When that happens, they hand over 17 percent of their income until the $30,000 tuition is paid off. If students don't find work within five years of completing the program, the ISA is automatically dissolved. It's a business model that allows Lambda to brag about investing in students — which, in many ways, it still does. The school provides living stipends and even housing to some students who need it. But reselling ISAs muddies the narrative a bit since Lambda can make money long before students find jobs...
Shortly after the arrangement was called out on Twitter, following a report by The Verge about some students' disappointment with the curriculum, Edly began taking down pages that referenced the Lambda partnership. Edly did not immediately respond to a request for comment about why these pages were taken down, and Lambda declined to comment on the nature of the partnership at all.
"I wonder why Lambda isn't so keen on seeing discussions about how students are being packed into the same kind of CDOs that brought us the financial crisis," tweeted David Heinemeier Hansson, the creator of Ruby on Rails, who's been tweeting screenshots of Edly's past statements about their ambitions as well as links to Google's cache of Edly's pitches to investors.
Last year Wired reported that nearly half of Lambda's ISAs had at least partly been sold off to investors. They also note that in January of 2019, Lambda "received $30 million from investors including Google Ventures, Y Combinator, and Ashton Kutcher."
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Lambda's ISAs promise an alternative to traditional student loans by allowing students to defer tuition until they've landed a job that pays $50,000 a year or more. When that happens, they hand over 17 percent of their income until the $30,000 tuition is paid off. If students don't find work within five years of completing the program, the ISA is automatically dissolved. It's a business model that allows Lambda to brag about investing in students — which, in many ways, it still does. The school provides living stipends and even housing to some students who need it. But reselling ISAs muddies the narrative a bit since Lambda can make money long before students find jobs...
Shortly after the arrangement was called out on Twitter, following a report by The Verge about some students' disappointment with the curriculum, Edly began taking down pages that referenced the Lambda partnership. Edly did not immediately respond to a request for comment about why these pages were taken down, and Lambda declined to comment on the nature of the partnership at all.
"I wonder why Lambda isn't so keen on seeing discussions about how students are being packed into the same kind of CDOs that brought us the financial crisis," tweeted David Heinemeier Hansson, the creator of Ruby on Rails, who's been tweeting screenshots of Edly's past statements about their ambitions as well as links to Google's cache of Edly's pitches to investors.
Last year Wired reported that nearly half of Lambda's ISAs had at least partly been sold off to investors. They also note that in January of 2019, Lambda "received $30 million from investors including Google Ventures, Y Combinator, and Ashton Kutcher."
from Slashdot: News for nerds, stuff that matters https://ift.tt/2wjkcXr
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