MSU’s Nassar Settlement; Who Will Pay?
The settlement has finally come and I would say quite quickly.
Michigan State University have settled with 332 victims of Dr. Larry Nassar’s sexual assaults.
How much, $500 million dollars!
That comes to approximately $1,500,000 per victim. The question now is who will pay for that settlement. You would think that should not even be a question, it should be you MSU, not your students and their parents. But it is not as easy as that according to a MSU spokeswomen.
According to an article in the Detroit Free Press that is the question that MSU is pondering per MSU spokeswoman Emily Guerrant.
As was stated in the article some of the ways they are thinking about raising the money to pay the victims and their lawyers are:
Hike tuition. MSU Interim President John Engler has been saying for a couple of months that tuition dollars will likely be used to cover the cost of any settlement. However, state lawmakers have expressed displeasure with any plan that would hike tuition above a 3.8% cap. MSU brought in $859 million in tuition revenue in 2016-17, according to its audited financial statements. That's 29% of its total revenue of $2.9 billion.
Hike tuition for graduate and out-of-state students. One way around the tuition cap is hiking tuition by a massive amount on out-of-state and graduate students.
Get more money from the state. Lawmakers have expressed displeasure with this plan.
Dip into its reserves. MSU ended the last fiscal year with $1.1 billion in unrestricted net assets. That's money that isn't legally contracted to a certain project, but often is set aside for particular projects. It's like a family's savings account where money is set aside for a new car, a new roof for the house and other projects. It can be switched to something else, or to cover an emergency, but that means those initial projects can't be covered. The two biggest chunks of what MSU has set aside are its unrestricted net assets for infrastructure ($557 million) and programs ($400 million).
Borrow the money. The school could bond for the cost and pay back over time. However ratings agencies have lowered their outlook and rating for MSU, meaning the school will pay higher interest rates.
Go after insurance. MSU has some insurance to cover the costs. However, Penn State had to sue it insurance carriers to get some money after the Jerry Sandusky scandal.
Are you really looking at raising the tuition of your students because your administration at best total cluelessness of what was happening or at worst they looked the other way when they heard rumors?
Why should the parents or the young men and women going to MSU or the young men and women themselves have to pay for your tremendous “mistake”?
Did you know that currently MSU is sitting on over $3 billion dollars in endowment money? Also as stated above MSU ended their last fiscal year with $1.1 billion in what they call unrestricted net assets. That's cash that they are not legally contracted to spend in a certain project or way. They usually use those fund, we are told, to pay for certain projects they want done.
Well to me it sounds like those projects you want to start or complete with that $1.1 billion dollars should be put on hold.
Please do not punish your perspective students, current students, their parents and grandparents or the state taxpayer by making them pay for your at best horrific mismanagement of the university.
How about by starting to use the cash you are paying in pensions and benefits to the former and current employees involved in the debacle or possible cover-up.