BloomTech and CEO Fined, Banned from Issuing Student Loans

The Consumer Financial Protection Bureau has imposed significant penalties on BloomTech for deceptive practices related to its loan programs.

The CFPB has permanently banned BloomTech and its CEO from issuing student loans and fined them a total of $164,000.
BloomTech, previously known as Lambda School, misled students about the nature of its income-sharing agreements, marketing them as 'risk-free' loans.
Students affected by these practices can now exit the program without any debt or have their loans retroactively capped at the tuition sticker price.
The company's job placement rates were found to be significantly lower than reported, with actual rates closer to 50% rather than the advertised 71% to 86%.
CEO Austen Allred is personally responsible for $100,000 of the fines and is banned from student lending activities for 10 years.