I don’t know, Rutgers is a state university—and don’t states usually put caps on their own liability?
Student paper is probably a separate entity. And the libeled student has to prove damages, which might not be insignificant, but monetarily, I don’t know. And if the paper retracts, it’s often the author, interestingly unnamed, on the hook. Though in this case vetting the article is a no brainer, the paper obviously knew who wrote it. I’d go with disciplining with the students involved. If they’re journalism majors, this probably gets them a job at MSNBC or the NYTimes if they prefer print.