(lively music) (upbeat music) (upbeat music ending) - Hello, I'm Kathleen Bade.

Welcome to this episode of "Working Forward" where we're shedding light on real-world workforce obstacles and opportunities to spark awareness and potential solutions.

There's a growing challenge in Arizona that workers face when navigating the maze of credentialing and career advancement.

As more adults seek better paying roles and shift into high-demand industries, many turn to certification programs, bootcamps, and alternative education providers with the hope of gaining new skills and a better future.

Some companies sell big promises, high job placement rates, impressive income boosts, and guaranteed career success.

But the reality is that many of these claims aren't true.

Misleading job placement statistics to predatory financial products leave too many students with heavy debt and no closer to their goal of career opportunities.

In the WorkingNation film, we're featuring a short documentary called "Unregulated" where we take a closer look at a lawyer who is tirelessly working on changing what a credible certification pathway looks like.

Let's watch.

- We fall into the trap often during times of crisis, during recessions, during a pandemic that you want an easy way out, that people are looking for a quick fix.

And students can quickly fall into a trap where they're spending a lot of money that they don't have for a program that had promised them jobs that don't exist.

(tranquil music) (tranquil music continues) (car whooshing) (furniture clattering) (keyboard keys clattering) (tranquil music continues) I'm from Louisville, Kentucky.

I grew up there, you know, my entire childhood, left for college, went to law school.

I wanted to use a law degree really to help people to use in some form of activism.

And then I came to D.C. to work at the Department of Education.

And that is really where I started to see for-profit institutions, like Corinthian, ITT Tech targeting students from vulnerable populations.

- Hey, ladies, why can't you get an education?

- You gotta do something right now, you can't wait.

- [Narrator] You're in the business of you.

- Had the idea to start Student Defense.

Quickly convince two colleagues to start it with me.

We wanted to really make lasting policy change in this space through representing students.

(tranquil music continues) (film whirring) (film clicking) Many of the largest, most notorious predatory for-profit chains are gone.

(tranquil music continues) (film clicking) But you see the sector evolving, and now there is a lot of buzz, and a lot of focus on short-term bootcamps, especially in the tech sector.

- So after the for-profits kind of crashed and burned, you kind of had three trends that overlapped, and that played into each other but that led us to where we are now.

So first, you had the macroeconomic environment.

(lively music) (film whirring) You had a huge amount of people being displaced out of jobs during the Great Recession, and that coincided with the rise of Web 2.0.

(film whirring) (lively music continues) Facebook and YouTube and Twitter, and these things were really new.

- These are places that were growing by leaps and bounds, and they needed skilled workers.

- CEOs who are going around the country talking about the importance of hiring only on skills.

- There's no need even to have a college degree.

- Demand for tech talent is just exploding.

- And what that created was this gold rush of startups in Silicon Valley, and all of these privately owned, and venture-backed bootcamps.

- Start your new career as a web developer in three months.

- Coding bootcamp could help you get in on the city's tech boom.

- You can see the benefits of bootcamps or short-term credentials.

- You know, in just four weeks, you can get such and such credential in order to be more marketable.

- They can do it quickly, they may not have to pay anything up front.

- They're solving a problem for an employer who's looking for skilled workers.

- And that was really compelling for a lot of people.

Like, policymakers and individuals wanted that to be true, that all you had to do was attend this school and that it would just kind of solve the problem of job displacement stemming from a recession.

- We have the opportunity to promote programs that we call, for example, coding bootcamp.

- Non-traditional programs like bootcamps, nano degrees and coding schools to find candidates with the necessary skill set.

- And now we're a few years down the road and we've seen a lot of kind of the real dangers of the attention that went to these programs early on before there was any real proven concept.

- Let me start by saying that there is a lot more good than there is bad in these spaces, but as long as there is a sliver of opportunity for a bad player to do something bad, they're gonna do it.

This is America.

- These startups claim they would profitably, for themselves and their investors, consistently get people into really hard-to-access jobs.

- They raised a lot of money, there's a lot of expectations, a lot of pressure to show growth.

And so they begin to do things that are not in the best interest of students.

(lively music continues) (film clicking) - Come to find out that a lot of the curriculum consists of Google Links.

- You know, we have class and no one's here, or we have class and the guy doesn't know what to teach us.

- And so I felt cheated, like severely cheated.

- One of the biggest cases that we've focused on has been the Lambda School.

- So you wanna be a web developer?

Check this.

Go to lambdaschool.com, sign up, pay nothing upfront.

- Or what was formally called the Lambda School, now called Bloom Tech.

(happy music) - The reason that they rebranded, I suspect, was all the negative press they faced as it came to light how low quality their program was.

- The school had been boasting 90% job placement rates.

- Subsequent reporting showed that they were actually placing fewer than one in three people in jobs, and that the way that they were arriving at their 90% rate was that they would just arbitrarily exclude people.

- They were not eligible for federal funds.

Students had to sign up often using an income share agreement, which put them on the hook for a percentage of their income down the line.

And Lambda had told them, "We don't get paid until you pay."

- It came to light that they lied about whether they were selling off students' income share agreements.

- They were not authorized to operate in the state of California, unbeknownst to many students.

- California fined Lambda School $75,000 for operating without a license, and they just continued doing it, right?

And there were no real consequences for anyone.

- Once we started filing cases against Lambda School, one thing led to another and we started getting flooded with these stories from students at other coding bootcamps, and the stories were remarkably similar.

(keyboard keys clacking) (clothes rustling) (car rumbling) (pensive music) (traffic whooshing) Hey, how's it going?

- Hey, good, how are you?

- Good, good.

Are there ways that we could bring impact litigation that would change policy for income share agreements to be treated under the law as private loans are?

- I mean, yeah, I think this is pretty critical because it's deceptive and misleading under the Consumer Financial Protection Act to say an ISA is not a loan, which most ISAs have seen say in all caps, "This is not a loan."

- 'Cause it'll still keep you from buying a house, getting a loan, all of those things.

- I think that we should put together a joint briefing for Congressional staff and Congressional members because I think we can create some precedent around how these programs are represented to students.

(tranquil music) - We as a society need to help upskill America's workforce.

It is a necessity.

It is something we owe workers.

The problem is it's hard to distinguish between the good players and the bad players.

- For years and years, we've seen companies operating by the same playbook.

So we really need to get at the root of the issues here and once and for all, putting in some sort of front end protections, accountability measures that prevent programs from operating unless their students are getting jobs, and their students can afford to pay back any loans that are taken out through the school.

- As this landscape evolves, policies and systems and oversight need to be asking the critical questions about how are the learners actually being served?

Are those promises that are being made being kept?

- Education is something we have to invest in.

And the best way for us to not have these kind of snake oil salesmen selling people the dream of a meaningful career is to have a post-secondary educational system that really provides opportunity for people and that is broadly accessible.

(hopeful music) (hopeful music ending) - Thank you for joining us for this episode of "Working Forward" and the premiere of the short film "Unregulated."

How can people seeking better career advancement programs identify what's legit and what's a scam?

Here to delve into the conversation is Jared Beard, assistant director of Human Services Department, Workforce Development in Maricopa County.

Also, we have Taylor Jones, a student at GateWay Community College, and the filmmakers Adam and Jaye Fenderson.

Welcome, everybody.

And Adam and Jaye, I'm gonna start right off with you because "Unregulated," your film, that is a fancy way of saying that there are no rules in place to make sure that things are on the up and up.

So tell us what you've learned about this uphill battle of regulating these career advancement programs.

- Well, I think you're exactly right.

When we were tasked with this short film to direct, we realized that it's really kind of like the Wild West out there.

And there are so many different options for students that it's really difficult to navigate.

And I think that in itself produces the challenge of how do you know what is a valid credential, a program that's going to pay off?

And how do students who really want to get a good, you know, build their career and get on a pathway to a high paying job, like take that next step, how do you know what's gonna produce a really great result?

- I was gonna say it's also difficult because of the speed at which all of these bootcamps and credentialing programs came up, there wasn't enough time for the government and for the states to really be able to regulate these and make sure that we are accredited or that, you know, the for-profit and the non-profit sectors are working together and making sure that we're getting what they're saying we're gonna get the student, they're actually giving it to the student once they graduate.

So it has been, like Jaye said, the Wild West.

It's just everything's happening, and students don't know which ones are regulated, which ones are not, and how to find a good one.

- Yeah, it seems like it's almost easier to be scammed than it is to not be scammed these days.

And Jared, this is your business.

So as you're playing Whac-A-Mole over there at the county level, how prevalent is this in Maricopa County?

- Yeah, I think the important thing to note with these training providers is they follow the money.

And Maricopa County's been very fortunate over the past few years to receive several large investments for economic development and new companies and new industries.

And so we're seeing these training programs pop up and if it is the Wild West, which it really is, we're trying our best to be the sheriffs.

We're really trying to keep an eye out, and use data to inform our decisions, and make sure everyone we work with in Maricopa County has as much information as possible to make the right decision for them in their situation.

- So give us some examples of some of the, you know, scams and websites and what they might look like.

- Yeah, I think, you know, the big thing is, you know, accelerated training, quick, you know, instant job placement.

You know, one of the things to note is if training providers don't have a network or a large employer partner, instant employment, it's a myth.

You know, jobs are forever changing and companies aren't going to wait the six months that some of these training programs take for that workforce.

They're trying to hire, they're trying to get people in.

And so, you know, those are some of the buzzwords just to keep an eye out for when you're working through these training providers.

- Yeah, and sometimes it may not even be fraudulent or a scam, but it's just not a sustainable business, right?

'Cause I wanna bring in Taylor here who had an experience.

She's well on her way now, thanks to GateWay Community College, of becoming a massage therapist.

But you basically lost a year.

Tell us about this detour that you had because you answered an ad on a job site that was, as Jared was saying, was put up by a business, a massage business sent you to this training course.

So that would make you think it's pretty legit.

- So I was interested in massage therapy in the first place and at the time I wasn't able to afford to go back to school.

So it said that it was gonna pay for my schooling and I only had to work for a Hand & Stone for two years.

So I'm like, that sounded like a perfect opportunity.

And I took it in and everything was like good, made me sign contracts and I thought I was well on my way to getting my credentials.

- But you did think something was a little off right off the bat.

Talk about that.

- Yeah, so when we first started the hands-on portion of the schooling, it started out in a hotel, like in a conference room.

So off the bat I was like, "What is going on?

Like, this does not feel right."

It wasn't at an actual school.

So they told us that the school was in the process of getting built.

So I was like, okay, I kind of gave them a little bit of leeway.

And then it was like towards the end of the program where they said, "Okay, the school's finally built, like we can start heading in there."

But when we got there, it was actually just in a medical plaza, so it wasn't like an actual brick-and-mortar school.

- And after 700 hours, it just shuttered.

And you basically learned about it, you were broken up by text message, but it was an email.

- Yeah, so in the state of Arizona, you have to have 700 hours to qualify to get your license.

I only had 48 hours left.

And it was through a email saying that the school just closed randomly.

We didn't get any notice or anything else.

- And to this day, have you heard?

- No, I don't know anything like why they closed.

- And you had expenses, you bought the table, the oils and all that stuff.

So even though, Jared, money wasn't exchanged, she lost time.

You would've graduated from that program this time last year, right?

- Yes.

- So you lost a year.

What sticks out to me is she signed a contract, so she still worried that something could come back to bite her in the future.

What is the rule of thumb for signing anything?

- Double, triple check.

I will say that, you know, it's not in my expertise.

There is free legal support out there for just reviewing certain things like that.

I would also encourage anyone looking to go into a workforce training program to work with your workforce areas, right?

You know, my office, the Workforce Development Division of Maricopa County, we work with training providers.

You know, there's an eligible training provider list that's maintained at the state where there's requirements for those training providers to be on it.

And so I would just encourage anyone who's interested, just it's free, you don't have to sign up or anything like that, but just to visit one of those offices and just talk with someone about that training provider.

See if there's a history, see if there's anything, you know, on the back end to kind of pull from to really just establish credibility with it.

- Well, and with the websites and the professionalism, everything looks so slick and legit on its surface.

So just identifying, as Jaye and Adam were saying, what's legitimate and a scam is harder than ever, right?

- Yeah, for sure.

Yeah, I think that's one of the lessons that we learned from the rise in the for-profit industry is that they're really great at marketing.

And I don't know off the top of my head what the numbers were, but more money was spent on marketing than on actual education of students.

And so I think like what we need to do as a public is raise awareness for these programs.

What are credible programs?

And I love what you're saying and, you know, check with your local workforce board, but students and individuals need to know where to find that information.

Like, if we have more of a public awareness campaign, where do you get credible information about job and employment opportunities and education opportunities?

So I think we as a public, we need to raise awareness, and storytelling is a great way to do that.

- Yeah, certainly the film does that.

So Adam, what did you learn through making of the film about the progress that's actually being made?

How far do we have to go still?

- I think that there's a lot of things changing right now.

And so we look at someone like Aaron in the film who is really pushing hard at a federal level to change this and looking at income share agreements across the country, and trying to make sure that all of these bootcamps and credentialing programs have some sort of guardrails.

And so I think that with that kind of fight, we are making a shift in the country, but I think there is, like you said, you have to follow the money, and if there's money to be made, people are gonna make money, and they're going to say scams, and they're gonna say whatever they want to say to make sure that people can, you know, find their program.

And Jaye mentioned that they spend more money on marketing.

It's if there's money coming in, they're just trying to get more students as fast as possible.

And so those types of scams are still gonna be out there.

But I do think that there is a push to look differently at this.

And with so many other options at universities, and at nonprofit institutions across the country to do exactly the same thing, which is, you know, credentialing and getting micro degrees and those types of things, like there's absolutely ways for students to find a more legit opportunity, and they just gotta look for it.

So when you see something that looks flashy, just kind of maybe pass on and go to your local community college or your local university and say, "What's a legit way to do this?

- And Taylor, you tried to do some due diligence, but it was really you and your fellow classmates that kind of dug into this.

Talk about when you decided as a group to kind of investigate what was happening.

- Yeah, it was like towards more the middle of when we did the hands-on portion.

Things just felt off.

Like, why are we having to pay for our own like oils and like things like that, or like sheets.

So we kind of like did some digging and it apparently had opened before under a different name, the school, and then same thing happened, closed, and then they just renamed it, and made it into a different school.

And so we kinda were like, "Okay, this doesn't look right."

- And has it kind of broken your trust?

- A little bit, yes.

(Taylor chuckling) It's hard to figure out what's a legitimate, like alternative school.

- And on that note, Jared, what are the red flags when they aren't obvious?

What are the telltale signs that this might be questionable?

- Yeah, I think just to touch on what Taylor shared really quickly is that that happens pretty often, that, you know, something will be labeled as this and then all of a sudden, it's gone.

But something new doing the exact same thing has a new name.

The one thing I will share about that that's pretty funny is the people don't change.

And so that's something that, you know, again, you know, my team and, you know, here at the county, it's funny to see these new training programs popping up but the same names, you know, or reaching out and looking for support and things like that from a training provider perspective.

And so again, just talking to the local workforce areas, I think there's a lot of benefit to that because we can identify some of those things.

As far as red flags go, really just touching on earlier, you know, instant employment and things like that, you know, if it sounds too good to be true, it probably is.

You know, getting a job, getting training, it's not easy.

You know, we have people, plenty of people with years of experience, advanced degrees and things like that still struggling to find work.

And so I don't think, to my knowledge, anyone's cracked the code on instant employment anywhere.

You know, the market's forever changing, and so I would just be wary of that, and ask those additional questions.

I would also just when you're looking at those websites, look for the contact information.

I think that that's really, really important.

A lot of the training providers that are kind of, you know, the ones we're highlighting in this work, don't really have great emails, aren't responsive on the phone or you'll get kind of that robot voice when you call the number and things like that.

And so I would just try to talk to as many people as you can from that training provider.

Ask those really critical questions you have and if you don't get the answers you're looking for, then move on.

- I'm curious, was your income share agreement, when they said that you didn't have to pay anything, that it was gonna be, you know, you just have to work for 'em two years, that sounds like indentured servitude.

- Yeah, so the contract was is that I was supposed to work for a Hand & Stone, like a specific location that they were gonna pay for all the schooling and things like that, and then I would just have to work for them for two years.

Like I would still get paid along the way, but I would just have to stay with them for two years.

And then after that I can move to any other location if I wanna work on my own.

I just had to do the two years for them.

- Is Hand & Stone still around or was that?

- Yeah.

- Okay.

- Yeah, it's a franchise.

Like... - Did you talk to Hand & Stone about it?

And they were like, "Yes, these are our guys."

- Yeah, so after the whole thing with the school closing down, I went into that specific location that I was supposed to go into, and they had no idea what was going on either.

Yeah.

- Oh that's crazy.

- Yeah, and then they told me once they found out like what was gonna happen, they were gonna call me back and they never did.

- Right.

- Wow.

- Yeah, it's the income share agreement is what we learned about when we were filming this was really interesting, this idea that "Hey, we don't get paid until you get paid."

And what they're really doing, instead of actually, you know, taking a little bit off your wages once you actually get a job, they're taking those agreements that you sign and selling 'em to banks.

And so they're saying, "Hey, we have, you know, 1,000 students here that are agreeing to pay us money later and so we're gonna sell it off to a bank."

And then if you don't get a job, they've already gotten paid and the banks are at fault.

And so that's how some of these companies are shutting down quickly 'cause they run out of money 'cause they're not actually getting these people employment.

So they're lying to the banks, and to the people that are buying these income share agreements.

And all the while they're just getting venture capital money to continue this going on and going on, which is why this, you know, blew up.

All this money was going, moving around and stuff.

And then all of a sudden things like Lambda in the film, it's like they shutter, shutter, shutter, shutter, shutter.

- That's extraordinary.

And real quickly, Jared, recourse, what can people do in Maricopa County if they run across something like this?

- Yeah, I would say if you run across it, I would, you know, Arizona's Attorney General Office does have kind of consumer protection laws in place where you can file complaints around, you know, misleading practices or things like that.

So there is a legal arm there to help and whereas it's not my expertise.

Also, depending on the training program, there are a lot of states that have a tuition recovery fund, and that is, you know, available for students.

If your private post-secondary institution of learning closes down, then those funds are really available for you so long as the program was accredited and it was registered.

And so there are opportunities out there.

It just depends on each individual situation.

- Well, this has been a great conversation.

I wanna thank Jared Beard, Taylor Jones, Adam and Jaye Fenderson for joining me to have this compelling conversation about a topic, and hopefully empowering Arizonans to make informed decisions about their future careers and avoid costly detours.

I'm Kathleen Bade.

Thank you for watching this episode of "Working Forward."

(lively music) (lively music continues) (lively music continues) (lively music continues)