FSU had tried a similar bike program whereby there were free bikes in the bike racks. It was meant for students to use on an as-needed basis whereby you leave it at a bike rack (on campus) when done with it. Most ended up being destroyed by pranksters or stolen. That didn't last too long: only a year I think.
Sometime around 2004 they closed off a road that split the campus in half to keep cars at the perimeter. That was an excellent idea, but the school still continues to promote driving by building new parking garages in the middle of the campus.
Something that I think schools should take notice of, if they want to encourage walking,biking, busing, is to rid of subsidizing drivers by non-drivers. At FSU every student pays somewhere around $55 a semester to park at school whether they drive to school or not. "Well if I'm already paying for it, I might as well use it" must be a factor in some people's minds. I was splitting my school commute between driving and riding. There were plenty of days where I was just a tad lazy and went with the car based on that thinking alone.