Michigan State University Agrees to $500 Million Settlement with 332 Nassar Survivors—Largest University Sexual Abuse Settlement in History

On May 16, 2018, Michigan State University agreed to pay $500 million to settle lawsuits brought by 332 survivors of Larry Nassar’s sexual abuse—the largest settlement ever in a sexual misconduct case involving a university, surpassing Penn State’s $100+ million settlement with Jerry Sandusky survivors. The settlement distributed $425 million to claimants who were part of the lawsuits, with $75 million held in reserve for two years for additional survivors who came forward. On December 4, 2018, Interim President John Engler announced completion of MSU’s financial transfer into the court-created settlement fund, though the financial settlement could not address the decades of institutional betrayal that enabled Nassar’s crimes.

The $500 million settlement represented an acknowledgment of Michigan State University’s catastrophic institutional failures spanning nearly two decades. Lawsuits against Nassar and the university alleged that MSU officials had been receiving reports of abuse since 1997, when coach Kathie Klages dismissed complaints from gymnasts about Nassar’s ’treatments.’ Despite receiving multiple reports over the years, top university officials led by then-President Lou Anna Simon publicly claimed Michigan State had ‘done nothing wrong’ in handling prior complaints about Nassar—a stance that intensified public outrage and demonstrated the university’s prioritization of legal liability over moral accountability.

Lou Anna Simon resigned in January 2018 amid intense backlash on the same day Nassar was sentenced to 40-175 years in prison. She later faced two felony counts and two misdemeanor counts for allegedly lying to police during the Larry Nassar investigation, though these charges were eventually dismissed. The resignation of MSU’s president marked only the beginning of institutional accountability—the entire athletic department leadership would face scrutiny for creating and maintaining the culture that enabled Nassar’s abuse to continue undetected and unreported for decades.

The settlement structure revealed how monetary compensation alone cannot address systemic institutional failures. While the $500 million represented significant financial accountability, survivors emphasized that the money could not restore what was taken from them: their childhoods, their athletic careers, their trust in institutions, and their sense of safety in their own bodies. The settlement also exposed how universities systematically prioritize reputation management and legal liability over the safety and welfare of students and athletes under their care.

Michigan State’s institutional failures demonstrated a pattern common across elite universities: when confronted with sexual abuse allegations against valuable employees, institutions protect the accused through denial, victim-blaming, and deliberate inaction until public exposure forces accountability. The university’s initial response—claiming it had done nothing wrong despite receiving reports since 1997—revealed how institutional culture prioritizes protecting institutional reputation over protecting vulnerable young people. The $500 million settlement represented not just compensation for Nassar’s victims but an indictment of the institutional structures that systematically enable sexual predators in positions of power and trust.