u/michaelnovati replied ·
Wow this is massive out of nowhere news. I'm processing and will report back...
BloomTech CEO fined $100,000 for "Deceiving Students", must stop collecting payments
5 of Michael's comments in this thread · View thread on Reddit ↗
u/Significant_Wing_878 wrote (the comment Michael replied to):
Way to low
u/michaelnovati replied ·
I think the penalty is effectively that BloomTech will have a VERY hard time operating. Kind of like how that WSJ article came out about 2U and they then rebranded all the Trilogy bootcamps to EdX and wiped the Trilogy brand off the face of the Earth.
The decree is like dozens of pages and extremely detailed so the legal costs for the CFPB likely far surpass the fine too.
u/Potatoupe wrote (the comment Michael replied to):
I didn't get an ISA. I'm surprised to hear they collect interest. I always thought you just pay back what their quoted price was.
u/michaelnovati replied ·
Yeah this was one of the big changes over the past few years.
THESE ARE ILLUSTRATIVE EXAMPLES, READ THE FINE PRINT OF ANY SPECIFIC ISA YOU LOOK AT!
It used to be: Pay $20K OR pay $0 to $30K depending on your salary and fine print. It was like two completely different looking options.
Now it's Pay $20K, period. If you want you can get a loan for the $20K and pay back that loan with an ISA, X% a month for 5 years but capped at $30K -> and if you pay $30K, that would be like a $20K loan with 10% per year for 5 years. And if you don't pay the cap it would be less than that.
Fundamentally the same idea, but communicated in a way that makes it analogous to a loan.
u/starraven wrote (the comment Michael replied to):
I have to mention the income share agreement I sent you from the first “bootcamp” I attended long ago was “firmly established” as I was kicked out it would apply to any tech employment that I had in the future. 👎 nope, they removed me from their program (unwillingly btw) and I n
u/michaelnovati replied · ★ FEATURED
In my opinion, people who leave prior to "finishing the program" are the largest problem with ISAs because that's when people get the most upset.... not only did they not get a job, but they didn't even finish everything!
For the ISAs we have, we don't have a "end of the program" and there is a clear refund policy if you leave early, but we try REALLY hard to proactively reduce costs to the value a person got if someone leaves early based on what they actually did and not just the calendar time in Formation the person is contractually required to pay. Like if Formation didn't work for you, but you had 25 mentorship sessions and did 100 hours of practice tests and tasks, and no issues reported in your weekly surveys and 1-1 checkins, then it's not fair to pay zero because you were on an ISA.
u/OutForAWalkBeach wrote (the comment Michael replied to):
hey, do you know who I can contact to have my ISA canceled? I emailed and called leif.org and emailed Bloom and only got a canned response from leif saying they will respond to my request but they don’t have a timeline. I was in Lambda School (now Bloom) UX Design Program from 20
u/michaelnovati replied ·
I have no idea and haven't heard anything.
Only ISAs for people who didn't get a job within 12 months are supposed to get fully cancelled (which is reasonable, the ISAs we had offered in the past had the same clause and even that felt like the most that would be reasonable).
But it also sounds like there are a number of other buckets of people to work through. People who made payments but might have paid more in interest than was advertised might get refunded some amount. And then people with valid ISAs who got jobs I think still have to pay but possibly get to transfer their payment method to a different type.
So I would genuinely give them time.
Almost all of the execs at BloomTech have departed and a lot of people at Leif have also departed. Given the government involved I'm sure no one wants to screw up the processing and it will take quite some time, but that they will do everything right.