Uncovering the Deceptive Practices of BloomTech

The recent news surrounding BloomTech, formerly known as the Bloom Institute of Technology, has shed light on the deceptive practices of the organization. Despite its promises of providing students with a pathway to high-paying tech jobs “risk free” with “no loans,” it has been revealed that the company engaged in practices that were not only misleading but also harmful to students. The US Consumer Financial Protection Bureau (CFPB) has taken action against BloomTech, permanently banning it from issuing any more student loans, imposing fines on the company and its CEO, and releasing some students from their debt.

One of the deceptive practices employed by BloomTech was the use of Income Sharing Agreements (ISAs) that were marketed as a way for students to avoid traditional loans. However, the CFPB has determined that these ISAs were, in fact, loans in disguise. Students were required to pay 17 percent of their future income for five years, rather than the $20,000 tuition fee. This arrangement allowed Bloom to earn significant finance charges on each agreement, leading to profits at the expense of students. Additionally, students who were unable to make payments faced the threat of collections, further highlighting the predatory nature of these agreements.

The Impact on Students

The repercussions of BloomTech’s deceptive practices have had a significant impact on students. Many students found themselves in debt due to the misleading terms of the ISAs, with some facing the threat of collections and additional financial burdens. The CFPB’s intervention, while a step in the right direction, may not fully address the harm caused to students who were misled by BloomTech’s promises of a “risk-free” path to employment in the tech industry.

In addition to the deceptive financial practices, BloomTech also faced criticism for its lack of transparency and accountability in its educational offerings. Students raised concerns about the quality of instruction provided by the company, with reports indicating that the curriculum frequently changed and relied on teaching assistants with limited programming backgrounds. This lack of professional instruction left many students feeling as though they had to teach themselves the course content, undermining the promises of a comprehensive education and job placement support.

Questionable Job Placement Rates

Another alarming revelation about BloomTech was the discrepancy in its reported job placement rates. While the company touted job placement rates of at least 71 percent, internal reporting to investors revealed a much lower rate of around 50 percent. This disparity raises questions about the accuracy and reliability of the information provided by BloomTech to students and potential investors. The misleading job placement rates further highlight the company’s lack of transparency and commitment to providing students with truthful and accurate information about their educational outcomes.

The story of BloomTech serves as a cautionary tale about the importance of transparency, accountability, and ethical business practices in the education industry. Students who were promised a pathway to high-paying tech jobs found themselves ensnared in deceptive financial agreements and questionable educational practices. The actions taken by the CFPB against BloomTech underscore the need for greater oversight and regulation to protect students from predatory institutions and ensure that they receive the education and support they deserve.