From ESPN:

The University of Southern Mississippi has revoked the scholarships of five members of its pep band who took part in the heckling of a Kansas State basketball player at last Thursday’s NCAA men’s basketball tournament game.
The school announced Tuesday that the five students also were removed from the band and will be required to complete a two-hour cultural sensitivity training course this week.

Here is video of the actual chant. Personally, I have no problem with the punishment. They embarrassed the band and their university with their chant, and thus they should no longer represent their school.