Portland State University, PSU, has decided to pay $161,500 to settle a discrimination lawsuit filed by a deaf student, Cindy Leland.

The $1 million lawsuit filed by Leland and the Fair Housing Council of Oregon 2012 accused the University for not permitting her to stay in an on-campus carpeted dorm and attend science labs because of her service dog. Since Leland was not allowed to enter anatomy and physiology labs by a teaching assistant, she couldn't complete prerequisites for an occupational therapy master's degree program.

The assistant said that the dog wasn't authorised to enter because chemicals used to store cadavers could be dangerous to the animal.

Plus, the university housing officials failed to install a security camera to catch the culprits who were responsible for middle-of-the-night frequent knocks on her door. As a result, she slept only for a few hours during finals week.

"Because of the roadblocks that PSU put up, it made it more difficult to pursue her graduate studies in the United States," Leland's attorney, Dennis Steinman said, Oregon Live reports.

Although Portland State denied all the allegations in the settlement signed Thursday, the University admitted that Leland faced numerous difficulties on campus.

Out of $161,500, about $142,500 will be shared by Leland and the housing council and the rest of money will be transferred to an account aimed at helping current and former students in disability discrimination lawsuits.

As part of the settlement, the Oregon University also agreed to amend policies regarding service animals and offer disability-education training based on the Americans with Disabilities Act and Fair Housing Act for employees.

"This will be an example for other universities across the country," Steinman said. "This is a great outcome not only for Cindy Leland, but for all disabled students who may have been discriminated against," Gazette times reports.

Echoing similar sentiments, Amanda Marshall, the U.S. attorney for Oregon, said the school's policy renewals are "a great step forward."