A Promise of a Better Future, A Reality of Debt

Imagine being told you’ve found a trusted partner for your education. A company that doesn’t just offer you a loan, but ensures the school you’re about to invest your future in is “quality verified”. This lender, Climb Credit, told prospective students that every school in its network had passed a rigorous “return-on-investment” test , promising that your educational investment would lead to a better career and a better life.

For thousands of students, this promise was a powerful lure.

They took out “Climb Loans” to fund tuition for vocational programs, believing they were making a safe, vetted choice. But the trust they placed in Climb Credit was tragically misplaced. Behind the slick marketing and verification badges was a system that prioritized profit over people, leaving a trail of debt and shattered dreams.

The default rate for these “safe” loans regularly soared above 20%, and for many of Climb’s partner schools, it exceeded a staggering 40%. The promise of a career-advancing education dissolved into the harsh reality of economic ruin.

The Corporate Playbook: How the Harm Was Done

Climb Credit, incubated by investment firms 1/0 Holdco and 1/0 Capital, built its entire brand on being a “trusted intermediary”. This was a deliberate strategy to differentiate itself from other lenders and drive up loan volume. The company and its parent firms knew students were looking for a safe path through the confusing and often predatory world of for-profit education, and they exploited that need.

Their playbook was built on a foundation of deception:

• The Sham Vetting Process: Climb claimed it would only fund a program if it passed its proprietary “return-on-investment” (ROI) analysis. But according to the Consumer Financial Protection Bureau (CFPB), this was often a sham. They funded programs they knew had failed their own analysis, programs they hadn’t even tested, and programs where the ROI calculation was based on “baseless, inaccurate, or otherwise unreliable” information. For new programs with no track record, they simply invented data, assuming high graduation and job placement rates without any factual basis.
• Manufactured Success Statistics: To lure in more borrowers, Climb advertised impressive graduate outcomes that were, as the CFPB alleges, “false and very likely inflated”. They claimed a “Median salary increase for Climb school graduates” of 70.3%. However, this figure was the result of a flawed calculation. A more accurate calculation, based on individual student progress, would have yielded a median increase of just 45%. When excluding students who were previously unemployed, the real salary increase was a mere 25%.
• Generalized and Arbitrary Data: For specific programs, such as those at the American College of Education (ACE), Climb advertised an “average grad salary” of $45,000-$55,000. This wasn’t based on what ACE graduates actually earned. Instead, Climb pulled nationwide data for the generic job title “Teacher” from a public website and arbitrarily created a $10,000 range around the median —despite knowing that many ACE programs did not even lead to teacher licensure.

This wasn’t an accident. Internal communications reveal that the company and its investors at 1/0 knew their data was weak. As early as 2017, a Climb employee confirmed to 1/0 that the company did not collect data “in a robust, systemic way”. They knew that most of their top partner schools “actually didn’t give us great data”. Yet, they continued to build and execute a marketing strategy centered on these deceptive claims.

A Cascade of Consequences: The Real-World Impact

The consequences of this playbook were not felt in corporate boardrooms, but in the lives of thousands of students who were left financially vulnerable.

Economic Ruin

The most direct impact was immense financial hardship. By inducing students to take on loans for low-quality programs based on false promises of high salaries, Climb Credit locked them into a cycle of debt. The company generated millions in origination fees and interest, profiting directly from the volume of loans it issued, regardless of the quality of the education or the likelihood of student default.

The high default rates are the most damning evidence of the human cost. A 40% default rate represents four out of every ten students at that school whose lives were derailed by debt from a program that was supposed to help them.

A System Designed for This: Profit, Deregulation, and Power

This story is a predictable outcome of a neoliberal economic system that treats education not as a public good, but as a market for profit. The actions of Climb Credit and its investors are a case study in how late-stage capitalism incentivizes predatory behavior.

The relentless pursuit of profit created a system where the primary goal was to maximize the number of originated loans. Student success was, at best, a secondary concern and, at worst, an obstacle to growth. By positioning itself as a “trusted” guide, Climb effectively hijacked the student’s decision-making process, steering them toward partner schools that would generate revenue for the company, not necessarily value for the student.

This model thrives in a deregulated environment. The for-profit education sector and the private lenders that fuel it have long operated in a space with insufficient oversight, allowing deceptive marketing and poor outcomes to become rampant. Climb’s parent companies, 1/0 Holdco and 1/0 Capital, represent the financial architecture that underpins this system.

Rather than being educators, they are investment entities that provided the capital and, allegedly, the strategic direction to extract wealth from the aspirations of working people seeking to better their lives. The commingling of staff and executives between the lender and the investment firms reveals a tightly integrated enterprise focused on financial returns, not educational ones.

Dodging Accountability: How the Powerful Evade Justice

When confronted with these allegations, the proposed resolution offers a bleak picture of corporate accountability. The “Stipulated Final Judgment and Order” lays out a settlement that allows the defendants to avoid any admission of wrongdoing.

The monetary penalties are particularly revealing. A judgment of $6.6 million for redress to affected consumers was ordered. However, the full payment of this amount is

suspended. The defendants are required to pay a civil money penalty of $950,000.

For a company that originated over $218 million in loans in 2022 alone, and whose actions caused at least $6.6 million in undisclosed fees, a penalty of less than a million dollars is not justice. It is the cost of doing business.

It sends a clear message to the industry that the profits from deceptive practices far outweigh the potential penalties. This outcome fails to hold individual executives responsible and allows the corporate entities to continue operating after treating the fine as little more than a business expense.

Reclaiming Power: Pathways to Real Change

This case underscores the urgent need for systemic reform to protect students from financial predators. Real change requires moving beyond case-by-case enforcement and restructuring the system itself.

Meaningful solutions must include:

• Strengthening Regulations: We need robust, non-negotiable rules that hold private lenders and for-profit institutions accountable for student outcomes. This includes gainful employment rules that cut off funding to low-performing programs and stringent oversight of all marketing claims.
• Banning Deceptive Practices: The specific tactics used by Climb—such as sham ROI calculations and using unverified data—should be explicitly banned, with severe, non-negotiable penalties for violations.
• Empowering Public Education: The most effective antidote to predatory for-profit education is a well-funded, accessible, and affordable public education system, including community colleges and vocational schools, that provides high-quality pathways to careers without forcing students into crushing debt.
• True Corporate and Executive Accountability: Fines must be substantial enough to deter misconduct, not just be absorbed as a business cost. Furthermore, the legal system must look past corporate shields to hold the individual executives and investors who orchestrate and profit from these schemes personally accountable.

Conclusion: A Story of a System, Not an Exception

The story of Climb Credit is not the story of a few bad apples. It is the story of an orchard designed to produce this exact kind of fruit. It reveals a late-stage capitalist system where essential social goods like education are transformed into financial products to be exploited for maximum profit.

The students who took out Climb Loans were the raw material for a business model that privatized gains and socialized losses. This single legal action provides a window into a much larger crisis, reminding us that without fundamental change, the next generation of students will remain vulnerable to the same predatory playbook.

All factual claims and figures in this article are derived from the legal documents provided: the Complaint filed by the Consumer Financial Protection Bureau (Case 1:24-cv-07868, Document 1) and the Proposed Stipulated Final Judgment and Order (Case 1:24-cv-07868-JLR, Document 12-1).

Climb Credit’s website is: https://climbcredit.com

You can read the legal complaint by visiting the CFPB link over here: cfpb_climb-credit-complaint_2024-10.pdf

You can also read about the stipulated final judgement and order: cfpb_climb-proposed-stipulated-final-judgment-and-order_2024-12.pdf