Lambda scandal emphasizes need for education industry to innovate responsibly and transparently

Coding bootcamp Lambda School has come under fire in recent days following a report from New York Magazine, which indicates that some of the statistics published by the company may be misleading. Further criticisms have questioned Lambda’s course quality, instructor qualifications, hidden financing deals, and low job-outcome rates.

Lambda’s missteps can be attributed to the Silicon Valley mindset of ‘move fast and break things.’

While some of this criticism is fair, some is misplaced. As co-founder of Lighthouse Labs, Canada’s leading digital and data workforce training organization and one of the largest software development training providers in the country, I know all too well the obstacles faced when building a high-quality educational institution.

Lambda’s missteps can be attributed to the Silicon Valley mindset of ‘move fast and break things.’ The problem is that education carries a higher moral responsibility to the end-consumer – in this case, students – than a typical Silicon Valley SaaS company. Students trust they will receive a top-quality education experience, regardless of the price tag, and that trust always needs to be front and centre whenever a school is making decisions. It becomes harder to do that, but not impossible, when you have accepted VC funding on the promise of tremendous growth.

On the opposite end of the disruption scale, traditional educational institutions often struggle to innovate rapidly enough to keep up in today’s world of constant change. A recent McKinsey Global Institute report estimated that 375 million workers are at risk of technological disruption significantly altering their work in a way they are not equipped to handle.

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To meet this challenge, the education industry needs to be able to innovate and adjust quickly to changing workforce demands. This need to find new and improved methods is even more important as we look to reskill and upskill mid-career workers for the technological upheaval currently underway.

The key is in how a school communicates this experimentation. I always fall on the side of transparency, as we have a responsibility to our students to ensure they are making informed and rational decisions. After all, this is their livelihood, their future. Our students often quit decent-paying jobs and give up months of their life for the promise of a creative, intellectually-stimulating career as a software developer. The opportunity cost for them is very real. Unfortunately, what we have seen in this instance is a school that felt pressure to obfusticate and promote itself, using what appears to be deceitful advertising practices around their job outcomes, at the expense of their students being properly informed.

“We have a responsibility to our students to ensure they are making informed and rational decisions.”
– Josh Borts, Lighthouse Labs. Image source Burst.

Despite this, Lambda has provided us all with new questions, ideas, and evidence in the battle to provide access to high-quality skills training to all Canadians. In the case of Lighthouse Labs, we have been carefully studying income sharing agreements (ISA), a new financial instrument Lambda touted as the future of education. These instruments look to align the financial outcomes of a school to those of their students.

Holding our industry to this basic standard of transparency is the role regulators should play.
 

While this sounds great in theory, in reality, ISAs require schools to raise significant investment and work best at scale, incentivizing aggressive marketing tactics similar to what Lambda is being accused of. In addition, there has been little to no research into its effectiveness relative to the already generous government-funded student loans our students have access to in Canada, which, I should add, already have income thresholds built-in.

To help address this gap, Lighthouse recently applied for a provincial grant to study the impact of ISAs on the efficacy of training, something we feel is necessary before we start recommending them widely. In the same vein, we are also very supportive of the work of the Future Skills Centre and the Canadian government in bringing an evidence-based approach to education – something that is sorely lacking from the industry.

Our core belief in allowing students to make informed choices is the reason that Lighthouse Labs publishes a comprehensive yearly job-outcomes report, with our methodology transparently detailed and the data audited by our provincial regulators as part of our student aid approval process.

While we are set to publish our 2019 report in the coming weeks, we are very proud of our market-leading outcomes, with more than 92 percent of our job-seeking students finding developer roles with 120 days of graduation. We also educate students throughout the admissions process, ensuring they are willing participants and not simply along for the ride; whether that is through an in-depth admissions interview or our job-seeker agreement that details expectations on what we expect from our graduates. We are not alone, with many of our industry colleagues following similar transparency-driven best practices.

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Holding our industry to this basic standard of transparency is the role regulators should play. Yet here, Lambda has taken a page from the book of its regulator-snubbing Silicon Valley neighbour Uber, having ignored an order to cease operations by the California regulator.

I can sympathize that regulator bureaucracy often slows innovation, and we’ve experienced these pitfalls ourselves. But we understand that regulators exist to protect consumers from deceitful and potentially harmful practices. It is an important responsibility and one we fully support. That said, too much red tape can have the opposite effect, preventing innovative training ideas from coming forward, ultimately hurting consumer welfare. To prevent this, regulators need to reevaluate their procedures, promoting innovation and enforcing transparency, while continuing to provide the oversight we all agree is needed.

We believe Canada has an amazing opportunity to showcase how technological change can benefit all Canadians, if we make the investment in efficiently training our workforce. But to get there, we need more innovation backed by evidence, not less. We need regulators who are aligned with our goals, as well as students, businesses, and the government all working together. But as Lambda has shown us, without transparency, all of this would be doing our students and the Canadian economy a disservice.

Feature image source Lighthouse Labs via Twitter

Josh Borts

Josh Borts

Josh Borts is Founder and CFO of Canadian coding bootcamp Lighthouse Labs.