The Massachusetts Institute of Technology reached a $6 million settlement with the parents of a first year who drank himself to death at a 1997 fraternity initiation, officials said Wednesday.

MIT will pay Scott Krueger's parents, Bob and Darlene, $4.75 million, endow a $1.25 million scholarship in Scott's memory and implement policy changes intended to curb underage drinking.

Among the most sweeping of the changes is one requiring first-year students to live in university housing instead of Greek housing. The policy will take effect in 2002 when construction of new undergraduate housing is completed.

Other changes include stricter regulations and harsher penalties for alcohol consumption, the requirement that fraternities and sororities have resident advisors and the banning of pledge recruitment during first-year orientation.

"With this agreement, we can now move on with the healing process," said MIT President Charles A. Vest in a statement released Thursday.

The agreement was reached after Vest visited the Kruegers at their home near Buffalo for mediated talks. Vest later sent a letter to the family taking responsibility for Scott Krueger's death.

"Despite your trust in MIT, things went terribly awry," Vests's letter read. "At a very personal level, I feel that we at MIT failed you and Scott. For this you have our profound apology."

Scott Krueger was found unconscious in the basement of MIT's Phi Gamma Delta fraternity with a blood alcohol level more than five times the legal driving limit. He died after three days in a coma. MIT has since banished Phi Gamma Delta from campus.