Lambda School, a buzzy coding bootcamp that has landed over $122 million in known venture capital to date, is rebranding to Bloom Institute of Technology, according to a blog post from CEO Austen Allred.
The company is also updating its tuition payment options to introduce an outcomes-based loan. The financing instrument allows students to take a loan with zero dollars upfront, and then get 110% of their tuition refunded, including fees and interest from an approved lender, if they are unable to secure a job within the next year. A student is only eligible for the refund if they apply to 10 jobs, network with 10 professionals and post at least 5 GitHub contributions to their public GitHub profile per week, for 46 of the 52 weeks within a year.
In order to apply for an outcomes-based loan, a student must be a U.S. citizen, permanent resident or DACA recipient with an established credit history and no outstanding education loan defaults. Additionally, temporary residents can apply for a loan with a co-signer who fits that criteria. At this stage, the outcomes-based loan is not available if a student lives in California. The move means that Bloom will be going beyond the original vision of scaling income-sharing agreements, the controversial financing vehicle that it pioneered. ISAs, which are used between 90% to 100% of students within BloomTech's cohorts, will continue to be offered as an option, with some changes.
"Education finance is evolving and becoming more sophisticated - this is the first change we’ve made to our financing model since I put it on a spreadsheet almost five years ago," said Allred, in an e-mail to TechCrunch. "We’re still in the early stages of building financial products that align incentives of schools and students, and today the vast, vast majority of institutions don’t align incentives or offer guarantees in any way."
Change at Lambda has felt inevitable for a long while. Nearly a year after its last layoff, Lambda School announced more cuts in April amid a broader restructuring. Then, Allred admitted that it’s been difficult to make his company’s vision work.
“We have been working for years on making incentive-aligned education work,” Allred tweeted in August. “It’s harder than we initially thought; we’ve had to invent a lot from scratch simultaneously and we have to get a lot of things exactly right.”
Lambda’s rebrand comes after years of scrutiny from former students and educators about the efficacy of its education. Most recently, independent journalist Vincent Woo published a piece alleging that Lambda is inflating its job-placement rates and then marketing those to eager students. The company is also facing a lawsuit from three former students alleging misleading financial and educational practices.
The name change could thus shake off some of the baggage the bootcamp has been holding onto (and help it attract more students).
"We are more committed than ever to removing barriers that stand in the way of a better career and higher income, [so] to better reflect our commitment to cultivating opportunity for even more people, we chose to rebrand to our new name, Bloom Institute of Technology," Allred told TechCrunch.
Moving to focus more explicitly on outcomes-based education places Bloom in the same bucket as other bootcamps eyeing accreditation as a future path (plus, the institutional-sounding name doesn't hurt, either). While Allred wouldn't comment on if Lambda School will eventually move into accreditation, he said that the pricing model change was so BloomTech could become "more scalable, flexible, and outcomes-oriented than ever."
Ultimately, Lambda School was one of the most well-known coding bootcamps out there, with a solid flurry of “Lambda for X” competitors such as Henry and Microverse. Other companies also offer ISAs, such as Pursuit, V School, Launch School and the Grace Hopper Program. Lambda's name recognition helped it become somewhat synonymous with the startup-powered bootcamp market.
With today's news, it will need to rebuild customer awareness alongside its pitch to get more customer loyalty.