I don't have any connection to either side, but I have to say that it seems reasonably fair to me to tie the release of the ISA to a covenant not to sue. (It's like if a car maker buys back my lemon car, I don't expect that I also get to sue them because my car was a lemon.)

If you traded in your old car, and paid for a lemon, their buying back the lemon is fine - but you probably want your old car, too.

The ISA is only one part of what they “paid” to attend. The other thing is months of opportunity cost, loans, etc. An ISA release does not make one whole with regard to those other losses.

It's absolutely shady. Lambda doesn't want students/customers to sue because they know they have committed fraud, and would lose in the courts.

Austen's lying again. Students fought hard to get the ISAs cancelled. They should have been working towards learning and job searching instead, not fighting a pathological liar and terrible organization.

The students had a reasonable fraud claim here which would've given them treble damages if they won.

My guess is after pressuring students to go away, Lambda School (or its lawyers) realized this and agreed to settle rather than fight it in court and risk having to pay 3x as much in addition to their legal costs.

One issue is presenting this as "the right thing to do." At minimum, there's a quid pro quo.