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It was partly covered by insurance.

Which came from insurance premiums paid by the university.

which was paid for with tuition, grant, donation, state or taxpayer funds

Which will continue to pay for the now-increased ongoing premiums.

Turtles

We're talking about the part that wasn't.

Even the insurance policy that distributed the payout was ultimately paid for with those funds.

Sunk cost

Plus obviously insurance simply means they're using tuition money to pay for ransoms, but all the time, not just when they're threatened.

If they're spending it all the time anyway, why shouldn't the payment have been made?