Corinthian College, once one of the largest for-profit higher education companies in the U.S., is seeking court approval of its bankruptcy plan. If approved, the plan would pay both students and general creditors out of what remains of Corinthian’s assets. But some agencies and states object, saying the plan also clears Corinthian of liability from their lawsuits.

The Consumer Financial Protection Bureau sued Corinthian a year ago, saying it charged exorbitant tuition for some programs and saddled students with unusually high interest rates on their loans. Three and a half billion dollars in federal student loans are at stake in the liquidation. Guilbert Hentschke, who studies for-profit universities at the University of Southern California, says a lot of groups stand to lose in the deal.

“We’ve got students, we’ve got governments, employees, we have the public,” he says.

He says Corinthian’s a canary in the coal mine, “but I think the question is, ‘What’s it telling us?'”

He says if the settlement forces lenders to tighten up, students anywhere could find it harder to get loans for college. Mike Reilly, executive director of the American Association of Collegiate Registrars and Admissions Officers, says having federal loans forgiven doesn’t mean students emerge debt free.

“A considerable portion of debt that those students incurred is not with the federal government, but with private lenders,” he says.

Reilly says Corinthian’s bankruptcy proposal could leave students and the government still stuck.