EAST LANSING, Mich. (Michigan News Source) – Michigan State University (MSU) found itself paying nearly $3 million to the Department of Education in July after botching federal oversight requirements tied to the Larry Nassar scandal. The hefty penalty comes from MSU’s failure to meet special conditions placed on the university after Nassar, a former MSU doctor, was convicted of sexually abusing hundreds of women and girls.
According to the State News, since 2019, MSU has been required to get federal approval for any new academic programs before distributing financial aid. This condition was part of the fallout from the university’s mishandling of the Nassar scandal and the the failure to report violated the Clery Act – a federal law mandating transparency around campus crime and safety.
Financial aid fumble: new programs slipped through the cracks.
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Despite federal mandates, MSU distributed over $30 million in financial aid to about 800 students enrolled in 16 unapproved new programs. The oversight came to light in December 2022, when MSU administrators “discovered” the Department of Education’s requirements.
Interim Provost Thomas Jeitschko attributed the blunder to administrative turnover following the Nassar debacle, claiming that no one currently in charge was aware of the compliance rules.
“How did it come to this? The answer is, I don’t know,” Jeitschko said, pointing to the complete changeover of personnel involved in compliance and financial aid since the scandal broke.
Damage control: MSU pays up and vows to do better.
After MSU self-reported the compliance error, the Department of Education launched a review to determine whether the federal funds distributed through the unapproved programs were legitimate. Although the department found no issues with the new academic offerings themselves, it required MSU to cover the anticipated default rate on the subsidized student loans, amounting to $2,761,502.
MSU paid the whopping fine on July 19th, marking another expensive chapter in the university’s ongoing efforts to put the Nassar nightmare behind it. Jeitschko emphasized that MSU is now doubling down on compliance, with new team members meticulously combing through procedures to avoid future missteps.
“We have new team members who have gone through things with a fine-toothed comb,” Jeitschko assured, signaling a renewed commitment to meeting federal standards.
This new saga is a stark reminder of the lingering consequences of MSU’s past failures. As the university continues to rebuild trust, it’s clear that the price of negligence is steep – and MSU is still paying.
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