“it seems reasonable to conclude that if the colleges were willing to settle, they felt that the judge would rule in the plaintiff’s favor.”
No, what you can conclude is that the college felt the settlement helped it avoid some risk. It might be the risk of loss at trial, but if so, it might be smart to settle even if the risk of loss at trial is 5%.
You can see this all the time in plea bargains, which are settlements of criminal rather than civil cases. If the defendant is looking the possibility of 30 years in jail if he goes to trial, he might accept a deal for 2 years even if he is pretty sure he could win at trial, because the 30-year-sentence outcome is so awful that even a small risk of it is unacceptable.
So maybe the college views a loss at trial as a long shot, but a disaster if it did happen, so it’s well worth $500,000 or whatever to avoid that risk.
Parties who believe they’d have the upper hand at trial settle all the time. The odds at trial affect the size of the settlement, but usually not the fact of settlement. Proceeding to trial is not only expensive and public; it also means a long period of uncertainty. Institutions hate uncertainty. You can’t budget for that. It’s better for business to have a known, acceptable cost right now than an unknown one in three years.
In my experience with these cases, reinstatement at the college would be an unusual settlement provision. Typically the accused is hurt and angry and doesn’t want to go back. They want money and/or a clean official record for transfer and grad school purposes.
(I am a lawyer, but currently get involved in this type of case as an educational consultant.)