MSU makes $500M settlement payment to fund for survivors of Larry Nassar abuse

Judge to work with survivors to determine individual payments

MSU reached a $500 million settlement with the survivors in May, and legal steps were taken recently to allow the university to make the initial $425 million payment to the Qualified Survivor Fund.

LANSING, Mich. – On Tuesday interim President John Engler and the Michigan State University Board of Trustees announced the completion of the university’s financial transfer into a court-created settlement fund, fulfilling its agreement with sexual assault survivors of Larry Nassar. 

MSU reached a $500 million settlement with the survivors in May, and legal steps were taken recently to allow the university to make the initial $425 million payment to the Qualified Survivor Fund.

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An independent judge will work directly with the survivors to determine individual payments. The remaining $75 million is set aside in a litigation fund.

“Making the payment on this settlement is an important step for the university, but it is not the only way MSU is accountable to those harmed,” Engler said. “The entire campus is focused on implementing the improvements we’ve made in health care practices, reporting policies, campuswide sexual assault education and prevention efforts and trauma-informed responses and treatment for survivors.” 

With the settlement funds being paid to the survivors, Engler also announced the university will redirect approximately $8.5 million remaining in the Healing Assistance Fund to the settlement payment, reducing the university’s borrowed amount from $500 million to $491.5 million.  

Trustees last December instructed MSU leadership to create the Healing Assistance Fund to facilitate access to counseling and mental health services for the survivors until a settlement could be reached and paid.  

“We felt the Healing Assistance Fund was a way to support the survivors during an incredibly difficult time,” said Board Chairman Brian Breslin.

“The fund was intended to be a bridge from the point of creation to when the survivors would receive payments from a settlement with the university. Now that the university has fulfilled its commitment and deposited the settlement funds, we support redirecting the remaining Healing Assistance Fund toward the $500 million lawsuit settlement. We hope survivors who need counseling support continue to seek out appropriate services including the several options available on campus.”

The Healing Assistance Fund was suspended in July due to fraud concerns, at which point the MSU Police Department initiated an investigation that remains active. The university is withdrawing its request for proposals for a new fund administrator. 

Any recoveries from the Healing Assistance Fund fraud probe and future recoveries from university insurers will be used to pay off the bonds used for the settlement.