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USC Is Paying $1 Billion To Settle Sex Abuse Claims. Where Does The Money Come From?

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(Frederic J. Brown/AFP via Getty Images)
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Last week, USC announced that it will pay out more than $1 billion to settle hundreds of sexual abuse claims against former campus gynecologist George Tyndall. Now, the campus is bracing for the financial fallout.

In a letter sent by email to the campus community and posted on the university's website, university President Carol Folt said the settlement will be funded "largely through a combination of litigation reserves, insurance proceeds, deferred capital spending, sale of non-essential assets, and careful management of non-essential expenses." She pledged to preserve the university's academic excellence.

Still, faculty and students are skeptical.

"Faculty have been shut out of any involvement or understanding of the budget," said USC law school professor Ariela Gross. "We kind of have to take their word for it, and that leads to suspicion and doubts."

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Seton Hall University Professor Robert Kelcher, who studies higher education finance, said students are likely to pay in the future for building maintenance that the university put off because of the settlement.

"For a university that gets a large share of its revenue from tuition, it's hard to say that students aren't going to pay at least part of the bill in the long run," he said.

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