A statement from the school said the penalties against the four students were "immediate long-term suspension and public service." The school cited federal privacy rules in not disclosing more about the students or their punishment.
The FBI is investigating whether any civil rights were violated.
"A criminal investigation is much more rigorous than an academic one, obviously," said Beth Anne Steele, an FBI spokeswoman. She couldn't say when the investigation would be complete.
Felton said the university's own investigation led to the four students. "To the best of our knowledge these are the only people involved," he said. "We're not pursuing it any further."
The commercially produced cardboard cutout of Obama was hung from a tree last week with fishing line around the neck.
A message taped to the cutout read, "Act Six reject." That refers to a scholarship and leadership program for minority and low-income student leaders at Christian colleges primarily located in the Northwest.
Felton wouldn't comment on the students' motive. Instead he cited a statement from Brad Lau, the university's vice president of student life.
"Regardless of the students' intent, the image of a black man hung from a tree is one of the most hurtful symbols of racism in American history," Lau said in the statement. "Displays such as this have no place on a campus that is dedicated to living out the teachings of Jesus."
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