Arizona, New Mexico, Oregon and Washington are among 21 states that have faced lawsuits from the Trump administration over such policies.
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.