Michigan State University has settled hundreds of lawsuits filed against it by the survivors of Larry Nassar's sexual assaults, according to multiple sources with knowledge.
The settlement will cost the school at least $500 million.
Attorney Jamie White, who represented dozens of women who sued the university, confirmed the settlement.
He said $425 million is to be paid now and $75 million will be held in reserve.
White said this is a chance for the women to begin to move forward.
“I don’t think they can ever be made whole, but this is a step in the right direction,” he said.
The settlement will be formally announced Wednesday following two days of closed-door mediation sessions between lawyers for the university and the survivors.
MSU is facing roughly 300 victims, according to figures in court records. Penn State University paid out $109 million to 35 victims in the Jerry Sandusky scandal.
Nassar was sentenced to 60 years in federal prison on child pornography charges and is in a maximum-security federal prison in Tucson, Ariz. He also faces a 40- to 175-year sentence issued in Ingham County and a 40- to 125-year sentence from Eaton County, where he was charged with a total of 10 sexual assaults. Those sentences will not begin until he finishes the federal sentence.
How MSU will pay for the settlement is under careful scrunity by parents, students, alumni and financial rating agencies.
Interim President John Engler has long said the costs will be covered by tuition and state aid. Lawmakers have said no state aid should be used.
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. If MSU's reputation has suffered from the scandal, it could see a drop in the number of students enrolling, which could lower that income.
On the other side of the ledger, the university has $1.1 billion in outstanding debt. Ashley Ramchandani, a credit analyst with S&P Global Ratings, said it considers MSU to be in good shape financially with debt and could likely add some if needed.
MSU also 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 projects can't be covered.
The two biggest chunks of what MSU has set aside its unrestricted net assets for are infrastructure ($557 million) and programs ($400 million).
Earlier this month, Moody's Investor's Service lowered its rating for MSU, meaning MSU will pay higher interest rates if it borrows money. The rating drops MSU to Aa2 from Aa1, affecting approximately $975 million of rated debt.
S&P Global Ratings credit analyst Ashley Ramchandani said previously that pending investigations into MSU, along with lots of turnover in senior leadership, prompted the firm to lower its outlook on MSU to negative. The lowering also reflects a belief that MSU's enrollment could drop, which means less money coming into the university. The firm said it isn't sure how all the fallout will shake out.