Michigan State University (MSU) paid the U.S. Department of Education nearly $3 million for failing to meet federal requirements put in place in 2019 following the Larry Nassar sexual abuse scandal.
Nassar was the director of sports medicine at MSU and the former U.S.A. Gymnastics team physician. In 2018, he was sentenced to up to 175 years in prison for the sexual abuse of female athletes he treated during his long-standing career. The school was accused of failing to protect Nassar’s victims by ignoring or dismissing complaints against him.
In 2018, MSU settled with 332 survivors for $500 million. The following year, the U.S. Department of Education fined MSU $4.5 million, requiring the school to make major changes, particularly to its Title IX procedures. At that time, MSU’s Clery Act fine was the largest ever imposed by the Department.
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As part of the oversight, the Education Department can prevent the school from expanding its academic programs if it isn’t making progress on improving campus safety. The university must also get federal approval for any new academic programs it creates before distributing financial aid.
Despite the requirement, the university gave more than $15 million in federal financial aid to around 800 students enrolled in 16 new academic programs without getting approval from the Education Department for the programs, State News reports.
Interim Provost Thomas Jeitschko told State News that the university did not realize it had to receive approval for new programs until Dec. 2022 when administrators “discovered” the provisions. Jeitschko claimed administrative turnover following the Nassar scandal played a role but said the university has been diligently addressing compliance issues in the years since, noting new team members have “gone through things with a fine-toothed comb.”
“How did it come to this? The answer is, I don’t know,” he said. “All the people who were charged with compliance with the education department, the disbursement of financial aid, all of those people have turned over since the Nassar thing.”
After the school reported the error, the Education Department opened an investigation to determine whether the department was liable for the ineligible financial aid disbursements. The department did not find any issues with the new programs but requested that MSU cover the expected default rate for the federally subsidized student loans, which totaled $2,761,502. MSU settled with the Education Department in June and paid the fee on July 19. Spokesperson Mark Bullion said no students were adversely affected by the settlement.
