MINNEAPOLIS — When the Chinese billionaire Richard Liu was arrested two months ago in Minneapolis on suspicion of rape, he wasn’t in town for business. Mr. Liu, a 45-year-old internet tycoon, was a student at the University of Minnesota, taking in lectures by day and enjoying dinner parties by night.

As prosecutors weigh whether to charge Mr. Liu, the case represents a setback for a university that has made progress on how it handles sexual misconduct. In recent years, the university has dealt with a series of sexual assault and harassment episodes involving students and faculty members, which have prompted a state audit and new campus policies. Now, the university is once again in the national conversation, and the focus this time is on a relatively new and lucrative academic program.

Mr. Liu, who has denied wrongdoing, was in Minnesota for a global business program, aimed at Asian executives, that is on track to generate over $10 million in tuition for the school since starting last year. His accuser, who has not been publicly identified, is a young Chinese student at the university who volunteered for the program.

The case “puts the university administration in an impossible situation” as it tries to simultaneously protect its students and its reputation, said Kristen Houlton Shaw, the executive director of the nonprofit Sexual Violence Center in Minneapolis.