One of the original coding schools must pay $375k over employment claims

In recent years, dozens of coding schools and boot camps have opened up, promising that they can teach students enough software programming that they can get a high-paying job in just a few months.

Now one of the most prominent institutions, New York's Flatiron School, will be shelling out $375,000 to settle charges brought by New York Attorney General Eric Schneiderman's office. The AG said the school operated for a period without the proper educational license, and it improperly marketed both its job placement rates and the salaries of its graduates.

New York regulators didn't find any inaccuracies in Flatiron's "outcomes report," a document the company is proud of. However, the Attorney General's office found (PDF) that certain statements made on Flatiron's website didn't constitute "clear and conspicuous" disclosure.

For instance, Flatiron claimed that 98.5 percent of graduates were employed within 180 days of graduation. However, only by carefully reading the outcomes report would one find that the rate included not just full-time employees, but apprentices, contract workers, and freelancers. Some of the freelancers worked for less than 12 weeks.

The school also reported an average salary of $74,447 but didn't mention on its website that the average salary claim only applied to graduates who achieved full-time employment. That group comprised only 58 percent of classroom graduates and 39 percent of those who took online courses.

Flatiron's application for licensing its second campus, opened in 2013, didn't go smoothly. In June 2016, Flatiron reached out by e-mail to inquire about its second license. New York's Bureau of Proprietary School Supervision responded two months later with a cease-and-desist letter telling the school to stop operations. Flatiron didn't stop operations while it was getting its licensing in order, so the Bureau held that the school's second campus operated from 2013 until 2017 without a license.

The $375,000 will be paid out as restitution to eligible graduates who file a complaint against the school with the New York AG's office within three months. Affected customers can file complaints online or by telephone at 1-800-771-7755. Any amount that isn't paid back to students will be retained by the New York Attorney General "as penalties, costs and fees."

"For-profit coding schools must comply with state requirements, including obtaining a license before operating," said Schneiderman in a statement. "Schools must also provide clear explanations of advertised job placement rates and salary claims of their graduates."

A spokesperson for the attorney general's office said the school "was very cooperative during this process."

A Flatiron spokesperson provided a statement to Ars via e-mail:

We’re proud to have pioneered a new form of transparency and accountability in education by becoming the first school to provide independently verified job outcomes reports and by establishing a money-back guarantee if students adhere to our requirements and don’t receive job offers.

The Attorney General’s office found nothing wrong with the data in our outcomes reports. While they agree that our independently audited jobs reports properly disclose the full methodology for calculating these figures—and explicitly allow us to use them going forward—they have asked us to more clearly label those disclosures on our website.

We hope this will become the standard in the industry for the benefit of all students.

The settlement requires Flatiron to maintain the necessary licenses and comply with all laws, rules, and regulations of the New York State Education Department. The school has also agreed to not count nonpermanent workers as employed unless they work for at least 20 hours a week, for at least 3 months, and receive compensation for their work.