Allow the players to either finish their educations on scholarship at Ped Aggy or transfer out with no penalty. There, no penalty for the athletes.
By your line of reasoning, Ped Aggy shouldn't shoulder any financial responsibility for what went down. It should all fall to "individuals."
The institution was flawed and complicit to its very core. It should face severe sanctions up to and including shutting down the football program for a couple of years. If the students there can't go to football games for a couple of years, boo-hoo. That's supposedly not why they're there, and it's hopefully not why they chose the place originally.
I still maintain that there are better mechanisms (the CIC, AAU and accrediting agencies) than the ncaa to force this, but ultimately don't really care how it's done.