BloomTech, formerly Lambda School, was fined by the CFPB for deceptive practices, including portraying Income Sharing Agreements (ISAs) as loans, leading to penalties and debt relief for students.
CFPB decision found that Bloom Institute of Technology's ISA contracts were essentially loans, with finance charges and consequences for non-payment, leading to penalties, debt relief, and CEO penalties.
BloomTech distributed over 11,000 loans from 2017 to 2023, profiting from finance charges and selling student debts to investors, although they stopped offering loans in 2024.
BloomTech must cancel loans for non-paying students, offer immediate debt-free program exit for current students, and provide refunds to graduates not meeting salary targets, capping loans at tuition price.
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