It's a tough pill to swallow. And almost assuredly the bill will ultimately be paid by students, either through tuition hikes or a reduction in programming at MSU.
But it's an outcome the university earned by enabling the conditions that allowed Nassar to serially molest athletes, primarily gymnasts, who came under his care as an MSU sports doctor.
Now, MSU faces three challenges: Paying for the settlement, fulfilling the pledge by interim President John Engler to make the campus the safest for students in the country, and restoring its reputation.
Meeting the financial obligation is fairly straightforward. MSU will combine its insurance policy with budget cutting, reserve funds and likely a bond issue. If enough money can be cut from school operations, paying off the bonds won't require a major tuition hike.
That's essential, both for the students and the university. Campuses are competitive for students, and if MSU prices itself beyond the value of the education it delivers, prospective enrollees will make more economical choices.
Making the campus safe must be the foremost presence. That goes well beyond adding a greater physical security presence. It requires changing a culture that did not take sexual abuse seriously.
Engler has assembled a top-level working group that includes sexual assault experts to devise a strategy that will include stronger accountability measures, training for students and faculty, streamlined reporting processes, and other tactics.
Keeping students safe from sexual assault and learning to quickly identify and deter potential predators is work that must never falter.
And it is vital to meeting the third challenge.
A rock-solid program for preventing sexual assaults and making sure it is put in practice every day will go a long way to assuring potential students that MSU is committed to their safety.
Streamlining the university bureaucracy, improving communications, adopting efficiencies and presenting a far less arrogant air when faced with criticism will help assuage donors and policy makers.
The key piece is finding the very best university president to guide Michigan State University long term. Engler has said part of his mission is developing a structure for the presidential search.
The next leader of MSU must be someone who projects strength, has impeccable academic credentials and is experienced in crisis response. It is not essential that he or she have an MSU pedigree. The university has become too insular, and that contributed mightily to the unfolding of the Nassar scandal. An outsider might bring a perspective the university has not had in a long time.
Of course, it would also help if MSU could start over with a new Board of Trustees. But the current board members who failed to watchdog the administration have not heeded calls to resign. By all means they still should.
The MSU debacle should serve as impetus for a ballot initiative that would eliminate elected boards at MSU, the University of Michigan and Wayne State University.
MSU can recover from this blow. It can scrape up the funds to pay the half-billion dollar settlement, though it won't be easy.
But it must fully commit to years of hard work and tough decision making to finally erase the damage done by Dr. Larry Nassar and a university administration that failed to deal with him.
— THE DETROIT NEWS (AP)