PSU is in deep trouble in football terms. Some here have tried to argue that maybe they'll weather this like USC did. That's very, very doubtful. They are going to have to compete with a 65-man roster from 2013-16, and the four-year bowl ban all but guarantees that good recruits won't come the next couple of years. The free-transfer policy will likely lead to what underclass talent they have now leaving.
If that weren't enough, PSU as an institution is just starting the nightmare. More trials are to come. Civil suits will follow. The Department of Education will investigate. The NCAA itself may investigate further to look into inidividual liability. In other words, this scandal - which was instigated by the football program - is going to remain on the front pages for years. That will further cripple recruiting. Altogether, PSU is not going to be allowed to have a "normal" roster (with four balanced classes) until 2020, and by that point they will likely have stunk on the football field for years, and have invested zero money in facilities (since they won't be able to afford it), so there is no guarantee recruits will suddenly line up to go there. I would not surprised to see Pitt emerge as the dominant program in Pennsylvania. (Incidentally, the two programs are going to renew their annual series, which will give Pitt the chance to drive that point home to recruits.)
Unfortunately for PSU, I expect them to be bad for awhile, maybe for good. So what does this all mean for the Big Ten? Consider the current divisions, which were set up in the name of competitive balance. The Big Ten formed these with the intent to split up the "Big four" (U-M, OSU, Nebraska, PSU) and give each one a protected game against another to keep things competitive. Here are the two divisions, with each team's protected rival in parentheses:
Legends Bo Leaders Woody
Michigan (OSU) OSU (U-M)
Nebraska (PSU) Wisconsin (Minn.)
MSU (Indiana) Illinois (NW)
Iowa (Purdue) PSU (Neb.)
Northwestern (Ill.) Purdue (Iowa)
Minnesota (Wisc.) Indiana (MSU)
If indeed PSU will be down, then not only will the Leaders division likely be weaker than the Legends, but there will be a competitive imbalance in the Legends division as well. Why? Because we'll be playing OSU every year while Nebraska, our presumed top competitor, will be playing a downtrodden PSU. Throw in MSU playing Indiana and we're at a significant disadvantage scheduling-wise. Likewise, OSU is at a disadvantage vis-à-vis Wisconsin, which gets a gimme win against Minnesota while OSU has to play us. The Big Ten set up these divisions precisely to avoid unbalanced schedules, and yet here we are. Get ready for Michigan to regularly have the hardest schedule of any conference contender. (Only Minnesota, which has to play us while we only play them, will have a tougher schedule year-in and year-out.)
The solution? An east-west geographical split:
This would balance things out nicely. Assuming Wisconsin is here to stay as a conference power, there'd be two power programs in each division. What's more, this would eliminate the need for cross-divisional protected games altogether, since all the rivalries would be contained within each division. Rivalries that the league is currently throwing by the wayside, like Wisconsin-Iowa and MSU-PSU (as much as we mock the Land Grant Trophy, MSU fans really liked that rivalry) get restored to annual meetings.
It will take a couple of years, at least, but at some point, if my pessimistic take on PSU turns out to be true, the league should really look into this.