Michigan State University paid a $2.7 million fine to federal education officials in July after it violated rules intended to monitor its financial and administrative affairs in the wake of the Larry Nassar sexual assault scandal.
The U.S. Department of Education in 2019 placed the university on a provisional standing for financial aid purposes, which meant it was supposed to get approval for all new degree programs before it could disperse federal financial aid for them, MSU spokeswoman Emily Guerrant said.
The university realized in December 2022 it had not sought approval for the new degree programs and self-reported the error to the department via email, Guerrant said. MSU and U.S. Department of Education reached a settlement agreement and the university was ordered to the pay the fine, which it did on July 19, Guerrant said.
The money came from general funds but not from tuition, Guerrant said.
MSU had awarded more than $30 million in federal financial aid to about 800 students for new academic programs without first getting approval for those programs, Guerrant said. The 16 academic programs were all later approved by the U.S. Department of Education.
The undergraduate academic offerings were bachelor of arts programs in African American and African Studies, Communication Leadership and Strategy, Digital Storytelling, Games and Interactive Media, Information Science, Public Relations, and Communicative Sciences and Disorders.
The university also created programs without preapproval for master of science programs in Athletic Training, Customer Experience Management, Data Science, Cybercrime and Digital Investigation, Financial Planning and Wealth Management, and PA Medicine. It established master of arts programs for Rhetoric and Writing, Criminal Justice as well as Applied Behavior Analysis and Autism Spectrum Disorder.
Officials with the U.S. Department of Education were not available Tuesday and Wednesday to discuss the fine.
MSU’s spokeswoman blamed staff turnover for the mistake and said it has been rectified.
“We did our own investigation,” Guerrant said. “We educated and trained staff (in the rules), and we have a new people in some of these roles. We have stressed the importance of the requirements.”
In 2019, a U.S. Department of Education report found that MSU violated federal law by failing to accurately disclose crime statistics for years, including the sex crimes of serial pedophile Nassar.
The report, based on a 2018 investigation that began as Nassar was incarcerated for sexually abusing girls and young women, evaluated MSU’s compliance with the Clery Act, a federal law requiring the disclosure of crimes on or near campus through statistical reports and warnings to students and staff.
Failure to comply can result in fines.
In 2019, the U.S. Education Department fined MSU $4.5 million and required the university to overhaul its Title IX compliance procedures to prevent the sexual abuse inflicted on women at the school by Nassar.
The scandal led to one former MSU officials going to jail for less than a year. Former MSU President Lou Anna Simon resigned under pressure for how she handled the fallout, and a charge of lying to police was dismissed. A Michigan Court of Appeals panel in 2021 vacated the conviction of former Michigan State University gymnastic coach Kathie Klages for lying to police after concluding her statements about not remembering a 1997 conversation were not material to a criminal investigation.
MSU also reached a $500 million settlement with more than 500 women and girls.
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