Fall classes will continue as scheduled for the 660 students who have already signed up, the university said.
Former students accused the colleges of colluding to fix tuition prices and lower financial aid offers.
Under the settlement, Torey Alston resigned immediately and will withdraw his lawsuit against the board. The board did not admit wrongdoing.
The peer-to-peer payment method and its PayPal parent have forged new ties with higher education institutions, the company said last week.