Lambda School agrees to end deceptive educational financing practices

"contains a provision that falsely asserts that the Contract is a “qualified educational loan” ..."

Did University of Phoenix qualify for "educational loans"? I'm constantly surprised why this sector gets a pass like this from bankruptcy.

'As part of the settlement Lambda will: (1) notify students that the bankruptcy dischargeability provision language is not accurate (2) retain a third party to review the terms of the school’s finance contract to ensure that it complies with all applicable laws; and (3) undergo a review of its marketing materials to ensure that the information is accurate and not likely to mislead consumers. '

I'm confused as to why this headline has to be so close to clickbait. I'm not even one to stand up for people like Lambda, I think a lot of bootcamps are shady at best, and actively deceptive at worst (Trilogy).

It is definitely important to note that that these loans can be discharged in bankruptcy. But as far as I know, isn't this less stringent than typical student loans, which can't be discharged in bankruptcy? Is the point here that there was a population of Lambda students who weren't aware they could discharge their loan, and this contract prevision was preventing them from doing so? Or was the school deliberately making that process more difficult? The article makes none of that entirely clear.

On the whole this doesn't scream "deceptive educational financing practices" to me. That sounds like a government agency press release making a mountain out of a molehill and trying to knock Lambda down a peg, but I might be wrong.

Edit: after reading how dischargeability impacts people's ability to take out the loan in the first place, yeah, this matters quite a bit, and I was wrong because I didn't understand how education financing works. I'll own that. Seems Lambda was being less than equitable in how they approached the matter, and hoping no one would notice.

Reading this, I'm actually not sure if Lambda implied the tuition wasn't dischargeable in bankruptcy when it actually is, or the other way around. If you sign up for Lambda and then go bankrupt, do you still have to pay them back?