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IT school in the USA offered students to pay only after employment: why did students take up arms against it

Lambda School promised a fast and cheap route to a lucrative technical career. Leaked documents and former students question this claim, reports INSIDER.

Photo: Shutterstock

When Henry Rosales joined Lambda School, he thought it would be a way out of a low-paying call center job in Las Vegas.

The school's inspirational Instagram ad promised to attract people like him with no technical experience and teach them lucrative professions like UX design or web development in 9-18 months.

After just over a year of part-time work and online lessons at school, Rosales felt cheated. According to him, the school was unable to provide the type of training that would allow him to pursue a career as a UX designer. “Towards the end, I just stopped because it was a waste of my time,” he said.

Rosales is not alone. Leaked documents from general meetings of the company in the summer of 2020, as well as in January and February of this year, led by the school's former chief operating officer, Molly Graham, who retired earlier this month, and others led by its chief commercial officer, Matt.

Wyndowe revealed that Lambda School only placed about 30% of 2020 graduates in suitable jobs during the first half of 2020. That figure stands in stark contrast to the 74% employment rate she advertised for her 2019 graduates, the latest figure the school announced.

In her tweet, Graham wrote that her mission was to "take the company through a key milestone" and make it "work well without me."

These documents, handed over by someone familiar with the company's affairs, as well as more than a dozen interviews with former students and teachers of the Lambda School, suggest that Graham is leaving, on a mission far from fulfilled.

The Lambda School's internal placement rate that it shares with investors is different from publicly advertised.

Founded in 2017 by tech entrepreneurs Austen Allred and Ben Nelson with the help of startup accelerator Y Combinator, Lambda School has offered an unconventional path for those seeking careers in computer science.

Instead of a four-year course, students could take a crash course in programming without paying their tuition in advance; The income-sharing agreement allowed students to pay a portion of their salary to the school after they were hired for high-tech jobs with an annual salary of at least $ 50.

Blog posts touted this as incentive-focused education.

With the global education technology industry valued at more than $ 106 billion this year, schools in North America are promising to teach students using a similar business model. The Lambda School itself has raised a total of $ 122 million in venture capital.

Lambda School welcomes thousands of students a year and has announced plans to grow exponentially to ensure that investors get a return on their investment.

“I see no reason why Lambda School shouldn't expand to tens of millions a year,” Allred recently told The Quest Pod with Justin Kahn.

But the school also has a history of questionable advertising. In 2019, Lambda School's employment rate approached 50%, while over 80% was publicly advertised.

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When asked to comment on the 30% after-school employment rate presented at the general meeting, Allred presented a second half 2019 results report that showed a student employment rate of 74%.

But to quantify that figure, he excluded about half of the 516 graduates from this report, for reasons including late graduation, lack of responses, or an indication that they are no longer looking for academic work.

While the school's internal documents and those it shares with investors only treat graduates who earn $ 50 a year, roughly the national average salary of entry-level programmers, as "qualified placements," its announced placement figures jobs include graduates who earn as little as $ 000 a year, less than the vast majority of pre-school students.

Allred defended the school's methodology as prevalent in the boot camp industry and said it has been validated by an independent group.

But the school's private auditors only corroborate the results of the report, not question the process used to obtain them.

Under pressure, Allred blamed the pandemic for low employment rates.

A spokesman for the Bureau of Labor Statistics said that while high-tech jobs were hit in the early months of the pandemic, the industry was relatively resilient and rebounding quickly. According to the spokesman, he now has more jobs than he had when the pandemic began.

Allred did not respond to a request for placement figures for the second half of 2020, although the slides suggested that initial placement rates from that period were slightly lower than from the beginning of the year.

This type of sampling has become common among major programming schools, according to Sheri Speakman, the former CEO and now advisor to the Integrity Council at Results Reports, a nonprofit organization that is set up to track curriculum outcomes.

The nonprofit has strict rules for reporting employment rates, but Speakman said the largest training schools rarely follow them.

Schools that report to the board should ask students if they are looking for work in their field of study prior to starting their program and count all students who said yes about employment.

Speakman asked why so many Lambda School students who decide to enroll in a tech boot camp report after completing it that they are not actually looking for a job in tech.

While the board does allow the suspension of some students from the general enrollment level - for example, those who graduate late can be suspended.

The school should also show the percentage of students who graduate on time and account for late graduates in the next graduation class. The Lambda School's methodology is at odds with these practices.

"They're cutting the denominator," Speakman said.

The Lambda School stopped reporting to the nonprofit in 2018 after the first group of alumni.

The full docs also indicate that Lambda School's business model may not be as “incentive-driven” as people think in school.

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According to last year's meeting documents, the school lost an average of $ 7250 per student. Another slide from January by Gramm illustrated the balance a school must find between student enrollment and employment levels to achieve profitability.

The slide states that the school's goal for the first half of 2021 was to achieve 50% to 70% student accommodation with 500 students per month.

But it was also clear that the school could still achieve profitability by recruiting 2000 students a month, employing less than half of its graduates in skilled jobs.

When asked about the slides, Allred denied that the school could be profitable with low student achievement, and said that some of the numbers presented were inaccurate because the school's variable costs would increase with the number of students enrolled.

Allred declined to disclose what the variable costs were, or explain why slides of supposedly inaccurate predictions of the company's path to profitability were presented at the general meeting.

Lambda School's slides show that its goal is to admit 500 students a month and find 50% to 70% of qualified jobs.

The graph also shows that Lambda School can become profitable if less than half of its students find work if it recruits 2000 students.

“To break even, we need to increase the number of students and the percentage of QPs,” says the slide. "Break-even comes when we keep these numbers for 14 months."

Allred denied that they made this statement.

Some students feel that the school does not support those with learning difficulties.

“For those students who are in the lagging 10%, why would they invest resources in helping those students succeed? Just let them fail in six months, let them waste six months of their lives, six months paying rent, ”said the former developer website, a student at the school on condition of anonymity.

Despite low margins, the school raised over $ 70 million in Series C last August.

In the following months, drastic cost-cutting measures were implemented, including cutting the curriculum by three months and eliminating most of its paid teaching assistants, or "group leaders" who were responsible for helping teachers teach, evaluate, and review student work.

“The thing is, these cost-cutting measures hurt students,” said a former data science instructor at Lambda School, who spoke on condition of anonymity due to fears of retaliation from the company. "Because we didn't have time to really bring the curriculum to the level it should be."

Allred promised to replace assistant teachers with additional instructors, but in April fired a third of the school's staff.

“The class size is about 150 students per teacher - I’ve just heard that number is growing,” said a student studying web development. The data science instructor also suggested that the student-to-faculty ratio in some programs is around 100: 1.

Allred said the student-to-faculty ratio at Lambda School was closer to 13 to 1. This figure includes instructors, teaching assistants, student achievement coordinators and other student-centered staff.

He declined to name the number of instructors, excluding additional staff.

“The faculty-to-student ratio is the wrong metric to measure the level of support any student receives,” he added.

Lambda School has ceased to be a school for many students

Thomas Phillips, who participated in the Lambda data science program, complained that the truncated curriculum made it difficult to learn the skills the school promised to teach.

“It stopped being a school,” Phillips said.

“They really love ambiguity,” added Phillips. "They say you will be hired earlier, because you do not need to work these three months."

Last year, the school announced it was ending its UX design program and will provide students with the option to either change course or terminate the income-sharing agreement.

In an official statement from the school, UX design is no longer a priority, but some students believe the quality of the program is to blame.

Rosales, one of the canceled course students, said he was unaware that the school gave students the opportunity to change programs or terminate the income-sharing agreement.

When he found out, it was already too late - he also missed the deadline. He completed the program but said he did not feel he had acquired the skills required to work in the field.

“If you know your curriculum is not good enough, why should you still hold someone responsible for $ 30?” Rosales said. "It doesn't make any sense."

Another student, Pablo Vaganyan, said that he joined the Lambda School to receive the hands-on help provided by its assistants. When the school got rid of the teacher assistants, Vaganyan was so angry that he stopped attending classes and shot a negative video for YouTube.

Vaganyan said that when he tried to terminate the revenue sharing agreement, the school demanded that he remove the review and pay $ 15. He ultimately refused.

“There is nothing wrong with a product review,” he said. "I bought a product and it turned out to be defective."

One student, who requested anonymity, said that studying UX design at Lambda School changed his life and is now pursuing a lucrative career in the profession.

“I’m making really good money now,” he said. -What I did changed my life, and I don't want it left unsaid. I am a fortunate graduate of Lambda UX School. I'm good".

At the same time, he said that the school did not provide any educational services or promised career development services. “My career went pretty well, I was able to fill the education gap that Lambda could not give me so that I could find a job,” he said.

Allred declined to comment on specific student allegations against the school, but said claims that the UX design program was closed due to its quality were false.

The instructor said that there is not enough money for many students.

The school's own 2020 Diversity Report states that more than a quarter of students are caring for children or other dependents while they study. “These are people who often find themselves in difficult life situations,” he said.

“The inner emphasis is on telling concrete, tearful stories about people whose lives have been so drastically changed for the better by Lambda. These stories were true, but the question is, how often did these true stories happen? " - says the instructor.

The school experiments with its students - and they are unhappy

This chorus of grievances has led to a number of legal complaints against the school, including from the National Student Legal Defense Network, a nonprofit student advocacy organization.

In May of this year, he filed a series of arbitration cases, accusing Lambda School of scamming students by advertising false employment data.

“If I had known their actual level of employment — let alone how difficult it was to attend school — I would never have signed up,” said Jonathan Stickrod, one of the students involved in the school's arbitration.

Stikrod, who now works in a cafe in Medford, Oregon, dropped out of community college to attend the school. He said he dropped out after a year due to poor school curriculum and cost-cutting measures.

While students' agreements prohibit them from filing a class action lawsuit, the NSLDN hopes that the Stricrod and others case will pave the way for a larger case.

John Danner, an early investor in Lambda and a board member, told me that he is knowledgeable about complaints about the school.

Danner, who invested $ 1 million shortly after Lambda's Series A, compared the complaints to his own experience of launching a charter school, Rocketship Education, which drew public backlash for teaching elementary school students on laptops without instructors for part of their day.

“They said we were experimenting on the backs of children,” Danner said. “But when SpaceX launched its first five rockets and they exploded, was that okay?” We are in a world of human development with higher stakes. However, you cannot say that you do not like the way things are, but you do not want people to try something new. "

For nearly a decade, the bootcamp industry has grown with investment from venture capitalists willing to bet millions on the promise of disrupting traditional education with little oversight and regulation.

It goes without saying for venture capitalists that some of the companies they play for will lose money.

But while such tests may be acceptable for unmanned missiles, student experiments are expensive.

Rosales still does not work as a designer and is afraid to get the job, knowing that in this case he will have to pay Lambda School.

The school recently sent him a letter demanding his banking information so that direct deposits from work can be tracked. If he disobeyed, he threatened to charge him the full $ 30 tuition fee regardless of whether he got a job.

Despite this, he holds on. “I don’t think I should be held accountable for the education I didn’t get,” he said.

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