Lambda School Rebrands: New Name and Identity

Bloom Institute of Technology: A Rebranding and New Financing Options

Lambda School, a prominent coding bootcamp previously backed by over $122 million in venture capital, is undergoing a transformation and will now operate as Bloom Institute of Technology, as announced by CEO Austen Allred in a recent blog post.

Introducing Outcomes-Based Loans

Alongside the rebranding, the company is introducing a new tuition payment model centered around an outcomes-based loan. This financial instrument allows prospective students to begin their education with no upfront costs.

Should a graduate be unable to secure employment within one year of completing the program, they are eligible to receive a refund of 110% of their tuition, encompassing all fees and accrued interest, from a participating lender.

Eligibility for this refund is contingent upon fulfilling specific requirements. Students must submit applications to a minimum of 10 job opportunities, actively network with 10 industry professionals, and consistently contribute at least 5 code submissions weekly to their public GitHub profile for 46 weeks out of 52.

Loan Eligibility Criteria

To qualify for an outcomes-based loan, applicants must be U.S. citizens, permanent residents, or DACA recipients possessing an established credit history and without any outstanding defaults on prior educational loans.

Temporary residents may also apply, provided they secure a co-signer who meets the aforementioned criteria. Currently, this loan option is unavailable to students residing in California.

This shift signifies Bloom Institute of Technology’s evolution beyond its initial focus on scaling income-sharing agreements (ISAs), a financing method the company pioneered. ISAs will remain available to students, constituting 90% to 100% of BloomTech’s cohorts, but with certain modifications.

A Changing Landscape in Education Finance

“The field of education finance is maturing and becoming increasingly sophisticated – this represents the first adjustment to our financing model in nearly five years,” stated Allred in correspondence with TechCrunch. “We are still in the nascent stages of developing financial products that align the interests of educational institutions and students, and currently, the majority of institutions do not offer such alignment or guarantees.”

Restructuring and Challenges

Change at Lambda School appeared increasingly likely in recent times. Following a previous round of layoffs nearly a year ago, further cuts were announced in April as part of a broader restructuring effort.

Allred acknowledged the difficulties encountered in realizing the company’s original vision. “We’ve dedicated years to making incentive-aligned education a reality,” Allred shared on Twitter in August. “It has proven more challenging than initially anticipated; we’ve had to innovate extensively and ensure precision in numerous aspects.”

Addressing Scrutiny and Building Trust

Lambda’s rebranding follows years of examination from former students and educators regarding the effectiveness of its educational programs. Recently, journalist Vincent Woo published an article alleging inflated job-placement rates and their subsequent use in marketing materials.

The company is also currently facing a lawsuit filed by three former students, alleging deceptive financial and educational practices. The name change is intended to distance the institution from past controversies and attract a wider student base.

“Our commitment to eliminating barriers to career advancement and increased income remains unwavering, [therefore] to better reflect this dedication to fostering opportunity for a greater number of individuals, we have chosen to rebrand as Bloom Institute of Technology,” Allred explained to TechCrunch.

Future Outlook and Accreditation

A greater emphasis on outcomes-based education positions Bloom Institute of Technology alongside other bootcamps considering accreditation as a future goal. The new, more institutional-sounding name is also seen as a positive step.

While Allred declined to comment on potential plans for accreditation, he indicated that the pricing model change was implemented to enhance BloomTech’s “scalability, flexibility, and focus on achieving positive outcomes.”

(Update 12/5/22: BloomTech Founder Austen Allred has stated that a trademark dispute served as the primary catalyst for the name change.)

A Competitive Market

Lambda School had established itself as a well-recognized coding bootcamp, inspiring a wave of competitors such as Henry and Microverse. Other companies, including Pursuit, V School, Launch School, and the Grace Hopper Program, also offer ISAs.

Lambda’s brand recognition contributed to its association with the startup-driven bootcamp market. However, with this rebranding, Bloom Institute of Technology will need to rebuild brand awareness and cultivate customer loyalty.