FRAUDBATCH S17EDTECH / ISA LENDING
Bloom Institute of Technology (Lambda School) logo

Bloom Institute of Technology (Lambda School)

CFPB permanently banned founder Austen Allred from student lending in April 2024 for predatory ISAs and fabricated job-placement numbers.

$122M
Capital Raised
9+ YRS
Lifespan
Thousands of students with ISAs marketed as non-loans
Body Count

AUTOPSY REPORT

Marketed coding bootcamp via Income Share Agreements pitched as 'not loans.' CFPB found Lambda advertised 85.9% job placement publicly while internal docs showed actual placement was around 50% within six months, with one cohort placing only 1 in 3 — and operated illegally in California despite a 2019 BPPE $75k fine . The 2024 CFPB order rescinded ISAs for unemployed graduates, banned Allred from consumer-finance activities for 10 years, and required restitution. Years of class-action suits and CA DFPI actions preceded the federal ban.

DAMAGE: Thousands of students with ISAs marketed as non-loans

TIMELINE

2017Founded as Lambda School, joins YC S17
2019California BPPE fines Lambda $75k for operating without authorization
2021California DFPI settlement
2022Rebrand to BloomTech / Bloom Institute of Technology
2024-04CFPB permanently bans Austen Allred from student lending for 10 years

SOURCES

→ CFPB: Action against BloomTech and Austen Allred→ Sandofsky: Fast Crimes at Lambda School→ Wikipedia: Bloom Institute of Technology→ YC directory: Bloom Institute of Technology
← MomentusFlutterwave →

Satirical project. Not affiliated with Y Combinator. All information from public records.