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Lambda School is Silicon Valley's big bet on reinventing education and making student debt obsolete. But students say it's a 'cult' and they would have been better off learning on their own.

  • Some of Silicon Valley's best and brightest believe that Lambda School is a new model for vocational education that could make student debt obsolete. 
  • The big innovation: Rather than paying up-front for tuition to its 9-month coding bootcamp program, Lambda School asks most students to sign income sharing agreements — where they pay a portion of their salary for the first two years after getting a job that pays $50,000 or more.
  • However, we spoke to former and current Lambda School student, who say that it falls short of that promise, with under-qualified instructors and an incomplete curriculum that requires them to rely on self-teaching and outside resources to complete the program. 
  • Those students say that the program is like a "cult," where they worry about criticizing Lambda School for fear of getting kicked out, and where they're encouraged by staff — including CEO Austen Allred — to respond to critical social media posts with positive testimonials. 
  • The Lambda School students say that when they voice concerns about the program or complain of harassment from fellow students, they get brushed off, ignored, or made to feel they were the problem.
  • Lambda School is a graduate of the famed Y Combinator startup accelerator program, and has attracted $48 million in venture capital from investors including GV (formerly Google Ventures), Stripe, and even Ashton Kutcher.
  • "While we can't respond to specific inquiries out of respect for privacy, we appreciate the concerns of any and all of our students. We are continuously aiming to be transparent on where we need improvement and the steps we are taking to address them," CEO Austen Allred said in a statement.
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Erica Thompson has always had an interest in technology. Her father, a municipal transit operator, taught her the basics of programming, which she practiced while he built computers in his free time.  

She initially studied music education, but after her father had a heart attack, she decided that it might be time to pursue a career in programming. She had just wrapped up a software development course at a local college in Los Angeles when she saw a Facebook ad for Lambda School — an online coding bootcamp that requires no upfront tuition.

She decided to take a chance to hone her skills and make herself more competitive in the job market, without paying out of pocket. 

It's that very sales pitch that's driven Lambda School, based in San Francisco, to a position of prominence in Silicon Valley. A graduate of the famed Y Combinator startup incubator program (previous graduates include Airbnb and Dropbox), it's gone on to raise over $48 million from investors like GV (formerly Google Ventures), Stripe, and even Ashton Kutcher. The school boasts that there are nearly 3,000 students currently enrolled. 

What makes it unique from other coding schools is its income sharing agreement (ISA) model. Students sign a contract, agreeing to pay 17% of their income for two years when they get a job paying at least $50,000 a year, with a maximum payout of $30,000. It also offers a less-popular choice to pay a flat $20,000 in tuition, instead. 

To many, Lambda School represents a better way of thinking about higher education and vocational training, as Wired put it in an August headline: "Lambda School's For-Profit Plan to Solve Student Debt." And because students attend Lambda School remotely for eight hours a day, it's theoretically open to anybody, anywhere. The model has proven so appealing, other startups are following suit with their own ISA-based business models. 

Lambda School boasts of its successes, saying that graduates of the 9-month program go on to work for companies like Amazon, Google, or Microsoft. According to the Council on Integrity in Results Reporting, 60.9% of Lambda School students were employed 90 days after graduation, going up to 85.9% within 180 days. Graduates earn a median annual base salary of $60,000, according to that same study — although a Lambda School spokesperson puts that figure at $70,000, and notes that many graduates are in rural areas where average pay is lower.

What Thompson found, however, was that Lambda School was very different than what she hoped it would be. She says that she was brushed off by staff when she reported racist harassment from two of her classmates.

Not long after, Thompson says she was told that she was in danger of being removed from the program if she didn't hit certain goals. She says that she ultimately was kicked out of Lambda School, towards the end of the program, just days after raising her concerns directly with CEO and cofounder Austen Allred. 

"It seems that if anyone speaks up and is too critical of the program in any of the channels, they react as if the student is the problem, though they mandate feedback daily," Thompson told Business Insider. 

This is indicative of the general atmosphere at Lambda School, according to 5 former and current students, most of whom asked for anonymity for the sake of their careers. We also spoke to applicants and other people familiar with the Lambda School program.  

They say that while Lambda School pitches itself as a first step towards better job opportunities, the reality can be more underwhelming: The curriculum is lacking, the instructors are often under-qualified, and students are afraid to speak out in a culture described as being akin to a "cult," they say. 

"Lambda School is not worth the life it takes from you, and it's not worth the dollar amount you agree to pay them back," a former student said.

Lambda School did not make Allred available for an interview. In a statement, Allred said:

"While we can't respond to specific inquiries out of respect for privacy, we appreciate the concerns of any and all of our students. We are continuously aiming to be transparent on where we need improvement and the steps we are taking to address them."

"We adopted the ISA model to open up access to students from all walks of life and are constantly iterating on our curriculum and processes based on their unique experiences and feedback. At the same time, we're working to streamline those same feedback loops to make them as effective as possible. There's always room to improve, and we welcome any additional feedback on how we can continue to raise the bar."

'Trust the process'

Allred is known to many in Silicon Valley as a charismatic leader with a compelling personal background. He moved to San Francisco from Utah to break into the tech industry, and says he first lived in a car while his career got off the ground.

He's said that he decided to start Lambda School under the ISA model after being "taken aback" when speaking with someone who couldn't afford the $10,000 to attend a coding bootcamp. The goal, Allred has said, is to increase the economic opportunity for anybody, anywhere, who wants to build their own lucrative career in tech.

However, Lambda School students say that in reality, the program feels like a "cult" that attracts people down on their luck or otherwise in tough financial situations, and then locks them into an intensive program that ultimately leaves them on the hook to pay back thousands of dollars in their future wages.

"Lambda School is literally a cult," a former student said. "Cults are hard to leave. Cults play on your emotional vulnerability. Cults keep you mentally and physically exhausted so you can be more compliant…They're specifically targeting people who are vulnerable in hard-life situations."

To that point, 5 current and former Lambda School students tell Business Insider that they feel that they can't criticize or critique the program. 

A recent blog post from Allred highlights Lambda School's process for gathering feedback, where students are given constant opportunity to submit their thoughts, both directly to instructors and anonymously. 

However, the students say they don't feel comfortable airing any grievances: They're not only concerned about getting kicked out of the program, but also that they may end up blacklisted by companies like Nexient that are known to hire Lambda School graduates. 

Often, when students do bring up concerns about the school, they're just told to "trust the process," two sources say.

"It almost feels like gaslighting," a student said. "A lot of students have brought up similar concerns, and they're continually disregarded. There's a mantra they keep repeating: 'Trust the process of Lambda.'"

Troll defense

Allred, for his part, is known for personally responding to critics of Lambda School on social media. "People want to think that Lambda is a scam, because they want to believe the results we're producing are impossible," Allred recently told Wired.

It's common for students to spring to the school's defense, too. 

For example, when somebody posted to Twitter saying "Lambda School is trash," or when a Reddit user last year wrote a post saying "Is Lambda School really terrible?" users claiming to be Lambda School students chimed in with their thoughts. While those posts can sometimes contain critiques of the program, they're usually positive on Lambda School overall. 

"Your experience will vary based on who is your instructor and your PM, as with everything, some are better than others, but honestly, overall, I have had a really good experience, and I'm very happy with it," one commenter said.

However, these posts are at least sometimes made because Lambda School encourages students to defending the company's reputation in public, students say – with management, staff, and even classmates all known to encourage students to respond to any haters. 

A screenshot of Lambda School's main chatroom on Slack, shared with Business Insider, shows Allred himself thanking students for responding to a critical Twitter post. "Thanks guys for tweeting there, appreciate that," Allred wrote, as he shared a link to yet another Twitter post. 

'The curriculum is garbage'

The Lambda School students that Business Insider spoke with said that the actual curriculum has its problems, too. Expectations are unclear, they say, with constantly-shifting deadlines and classwork assignments that are themselves packed with software bugs. 

Some students say that to actually master the programming topics at hand, they had to use outside resources like Treehouse, Khan Academy or YouTube, because the Lambda School program itself wasn't sufficient. One former student goes so far as to say that it doesn't do enough to teach the fundamentals of computer science.

"Everyone knows the curriculum is garbage," another former student said. "They know it's not working. If you're keeping up, you either already had a foundation or you're self-teaching. The actual school is not effective at teaching. People are going outside to get what they need."

In general, many graduates who found jobs feel they would have been successful without Lambda School, though the school gets the credit for their success, two former students say.

Ultimately, some students say, they feel like they would have gotten the same or better education in coding with self-guided learning programs from places like Udemy or Khan Academy. 

"Lambda can do exactly the same as $10 course from Udemy," a former student said. "If you are able to get any resource on the Internet and spend the next few weeks actually reading through it and coding small projects, you're going to get a better experience than Lambda."

Students also give poor marks to the quality of teaching staff at Lambda School. Three current and former students complain that instructors are often themselves graduates of other coding bootcamps, with little real-world experience. One former student describes the instructors as "highly incompetent." 

Among the teaching staff is Ryan Allred, brother to CEO Austen Allred, who works at Lambda School as a data science instructor. However, his LinkedIn profile indicates that his experience in the tech industry consists of graduating from a web development bootcamp and working as an intern in the AI-related field of deep learning.

A Lambda School spokesperson defends his experience, and says he's "one of our higher rated instructors at the school." When Business Insider checked his LinkedIn profile after reaching out to Lambda School for comment, Ryan Allred's previous experience had changed from "Deep Learning Intern" to "Deep Learning Engineer."

Current and former students also say that Lambda School wouldn't be able to run without the labor of its team leads: students who are employed by the school to lead team meetings, fill out forms rating student performance, and conduct one-on-one meetings to review code. 

'Disorganized'

Former and current Lambda School students describe the program as "disorganized," with topics, projects, and even the length of the program itself seemingly changing at random. 

Starting in May, Lambda School extended the length of the program from 30 weeks to 9 months. A spokesperson says that existing students were given the option to either finish the program as scheduled, switch to the 9-month timeline, or else leave the program without triggering their ISA. No students stayed on the 30-week plan, the spokesperson said. 

However, three sources say that students weren't warned of the change at all and suddenly had their expected date of graduation extended by about a month with no warning. That presented a potential financial risk, the sources say, given that many simply don't have the time to work paying jobs while enrolled in the intensive program. 

This kind of disorganization appears to have led to at least one costly mistake for Lambda School: In August, Business Insider reported that Lambda School was facing a $75,000 fine for failing to obtain a key registration with educational authorities in the state of California, where it's headquartered.

At the time, Allred blamed Lambda School's former legal counsel for the decision not to apply for the registration in the first place. Failing to obtain that registration could endanger its ability to continue to operate, regulators told Business Insider. Currently, Lambda School's registration application is under review, authorities say. 

Read more: The hot Silicon Valley coding bootcamp Lambda School is paying a $75,000 fine for not registering properly with the state of California

Two people also say that the application process for Lambda School is confusing and inconsistent. Susan Money, from Michigan, said that she was unimpressed with the quality of a prerequisite screening class required to enter the program, and she never heard back from Lambda School after she completed it.

Another, Jacqueline Homan of Pennsylvania, who applied for the program hoping it would lift her out of poverty, said that she withdrew from that same class for medical reasons, and was told that she could re-enter at any time — but was bumped from Lambda School's Slack without notice in the interim period and couldn't raise Lambda School for help, even though she contacted the school to add her back.

Later, when Homan posted about her Lambda School experience on Quora, Allred responded, saying Homan's statements were false and that she was not accepted. Homan says she never received any rejection email.

"I basically got blown off," Homan told Business Insider. "If a program like that, that practically guaranteed job placement, if something like that isn't for someone like me, who the hell is it for?"

Diversity matters

Lambda School prides itself on a diverse student body. Because classes are held remotely, and because there's no upfront cost, it can accommodate students who might otherwise not have access to an education in programming.  However, current and former students say that they've been disappointed that Lambda School's teaching staff isn't diverse, in turn: most of the school's instructors are male or are not from underrepresented groups.

"Diversity is an important area of focus for the team," a Lambda School spokesperson said. "There's been little turnover on the instruction team, and the initial team was hired primarily on referrals from the founders' home state of Utah, not a very diverse state. As we've grown we've adopted a rigorous hiring process that has resulted in 5 of the last 7 instructor hires coming from underrepresented groups."

Still, students say, Lambda School can sometimes make for a learning environment that's uncomfortable for students from underrepresented groups, with staff doing little to intervene. Students recall instances of racist memes spreading through the Slack chatrooms, or when a white male student wore a Mexican sombrero to a presentation in front of the class.

On one occasion, a former student says, instructors started referring to each other as "Nazis." Lambda School says it was unaware of this incident and could not find a record of it on its internal Slack. 

"We take all forms of racism, sexism, and other discrimination very seriously," the spokesperson said. "Many students have been removed for violating our student code of conduct, which is primarily focused on ensuring a positive, safe learning environment for all students. We actively respond to inappropriate, unprofessional, and discriminatory content."

When students do report harassment, however, they're brushed off, ignored, or made to feel that they were the problem, students say. That was the case with Thompson, the student who says she was dismissed from the program after complaining of racist harassment. 

"They advertise the school as being for non-traditional students who may not be able to afford other routes into the industry, but those same students are also less likely to be able to get justice if something goes wrong," Thompson said. 

'You have to buy into it'

So, ultimately, is Lambda School worth it? That appears to be a matter of perspective. 

The $60,000 median base salary of Lambda School graduates, as reported by the Council on Integrity in Results Reporting, is slightly below the $65,000 median across all coding bootcamps according to Course Report, which studied programs such as Hackbright Academy, Hack Reactor, and Fullstack Academy. However, going with Lambda School's own figures of $70,000 makes for a more favorable comparison.

A Lambda School blog post says that it plans to share more data on graduate salaries and employment each quarter, starting early next year.

Furthermore, the income sharing agreement model doesn't necessarily mean that Lambda School is cheaper than its competitors in absolute terms. Both the $20,000 flat-rate tuition plan and the $30,000 cap on ISA repayments over the two-year period are well over the average bootcamp tuition of $13,584, also according to Course Report. 

To be sure, not all Lambda School students pay as much as $30,000. According to Lambda School's own math, if a student makes the minimum $50,000 annual salary that triggers the ISA, that student would be on the hook to pay $708.33 a month, totaling to nearly $17,000 at the end of the two-year repayment period.

A spokesperson points out that Lambda School's program is significantly longer than other programs of its like, and says that it includes more resources to help students get a job after graduation. The spokesperson said that the various coding education programs are very different, and it can "be like comparing apples and oranges." The spokesperson said that "we have always been open and upfront about the cost of our program but believe it is important to also be transparent about other school factors."

There still remains the question of cost, however, given that Lambda School's ISA means that students will be giving up a portion of their earnings after graduation for the two-year repayment period. 

"That is an affordability concern for students who are getting a job and will still have to make ends meet, pay for shelter, pay for food, and take care of medication and other life expenses," Joanna Darcus, staff attorney at the National Consumer Law Center, told Business Insider.

Still, despite these concerns, a former student says it's no surprise why so many of their fellow students and graduates jump to Lambda School's defense on social media and elsewhere. For them, Lambda School is a big, bold bet on their future success. That means that when things do go wrong, they may not want to admit it — even to themselves, the former student said. 

"If you're in Lambda School as a student, you have to buy into it," a former student said. "You told your friends and family and girlfriend and kids that you're going to become a software engineer. You don't want to look like a loser if you didn't make it. I think people put all their accountability on themselves for making it work when the school is failing them."

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