The U of I could have done the right thing from the outset, announcing up front that they would pay the state's portion of the settlement. They surely would have avoided a good portion of this brutal press coverage and public outcry.
Instead they get the worst of both worlds - they pay the bill and take a much worse PR hit than necessary. Just brilliant public relations-ing. Strategery!
Did you really see this playing out any other way? If Iowa could figure out a way to do something bad and then look bad while addressing it, they'll do it. I think it's a minor miracle that they even offered to pay the money back given how tone deaf that administration is.