Cases

Lambda School

Student Defense, on behalf of three former students of the online coding bootcamp Lambda School, filed arbitration demands on May 13, 2021, alleging that the school’s use of false job placement rates and other deceptive marketing practices entitles them to relief, including cancellation of the Income Share Agreements (“ISAs”) that the school uses as a type of loan to fund tuition. 

Lambda touts itself as a pathway for its students to achieve career success. To attract students, Lambda advertised a job placement success rate of 85 percent, while internal documents reveal school executives told investors only about half of students were employed in relevant jobs within six months of graduation. But the misdeeds did not stop there: in 2019, the California Bureau for Private Postsecondary Education ordered the school to cease operations and submit a closure plan. But, in violation of California law, Lambda continued to enroll students anyway. Jonathan Stickrod, Linh Nguyen, and Heather Nye are the first three former Lambda students to file arbitration demands over these fraudulent claims. 

“Lambda sought to attract students under the false premise of inflated job placement numbers,” said Student Defense Senior Counsel and Cofounder Alex Elson. “The three students we’re representing have paid the price for Lambda’s deception, and we know they’re not alone. We’re committed to securing financial relief for those harmed by Lambda’s unlawful conduct.” 

Lambda School is an online coding bootcamp based in California, that offers courses in web development, programming, and other subjects. Lambda charges $30,000 for its program, more than double the reported average price of online coding bootcamps. Lambda’s business model is predicated on convincing prospective students to pay this large amount by promising that they will not owe any tuition unless they find a job that pays $50,000 or more per year. Through this financial arrangement, known as an Income Share Agreement, Lambda students agree to pay the school a portion of their post-graduation income instead of traditional, fixed loan payments.  

Lambda's false advertisements convinced students like Jonathan Stickrod to enroll. After watching a YouTube ad touting the school's "no upfront tuition payments" and reading about the school's high job placement rate, Jonathan dropped out of his community college program to enroll at Lambda. He later realized the program was nowhere close to what was advertised. Today — echoing the results of many others who enrolled at Lambda — Jonathan does not have a coding job. 

Lambda's ISAs contain arbitration clauses that force students seeking to vindicate their rights into arbitration, and to do so individually (rather than as a class). Student Defense, together with co-counsel from CalebAndonian PLLC and Cotchett Pitre & McCarthy LLP, is countering this prohibition by representing three students in individual arbitrations. The students hope not only to secure relief for themselves, but to chart a pathway for broader relief as the school's practices are exposed. 

Related Documents

Nguyen v. Lambda

Stickrod v. Lambda

Nye v. Lambda