"We haven't reached a destination point," Kelly said at a news conference with Floyd. "He knows he has all eyes on him. There is an intense amount of scrutiny, cynics out there who look at this as we had this put together since day one. We can't change what people think."
Floyd, who has caught more TD passes than any player in Notre Dame's storied history, said he has been to counseling, has changed his circle of friends and will stay in a residence hall instead of moving off campus.
In response to a question, he said he hadn't had a drink at a bar since his arrest in March but acknowledged he'd been in a bar to socialize.
The school's disciplinary arm chose not to suspend Floyd — even though it was his third alcohol-related brush with the law in two years. Kelly had suspended him a short time after his arrest. He missed spring practice, but Kelly allowed him to participate in voluntary workouts with the Irish this summer.
"I know I let a lot of people down," Floyd said.
Kelly earlier this spring said that Floyd would either play in all of Notre Dame's game this fall or none at all. He said a one- or two-game suspension would not have solved the problem.
"We took football away and it was really about making a decision to change his life because I didn't believe suspending for a game or two was going to make a difference," Kelly said.
If Floyd hadn't made some changes, Kelly said, "it doesn't matter how many games you suspend them, it's going to put them back to the same position."
Kelly said his decision was based on a gut feeling, informal meetings with Floyd and the observations of those around the receiver. It's one that is certain to draw criticism from those who say it was based on Floyd's talent and ability to make Notre Dame a better team.
Floyd holds the school record for touchdown catches (28) and ranks second in school history in receptions (171). Before his arrest, he had decided to return to school instead of entering the NFL draft. Floyd made 79 catches for 1,025 yards and 12 TDS a year ago as the Irish went 8-5 and won the Sun Bowl.
"There has to be integrity in what you do. ... There has got to be more than just winning games. I get it. I got to win games. I understand that. I also have to have fulfillment I can impact young men's lives in a positive way," Kelly said.
"I'm not concerned with public perception."
The 21-year-old Floyd pleaded guilty in June to misdemeanor charges and was sentenced to a year of probation. He was arrested about 3 a.m. March 20 after running a stop sign a block from the school's main entrance. Prosecutors say a breath test showed Floyd had a blood-alcohol level of 0.19 percent, more than double Indiana's legal limit for driving.
In June, St. Joseph County Magistrate Brian Steinke gave Floyd a one-year jail sentence that was suspended as part of a plea agreement. He also said Floyd cannot drive for 90 days and when he does, he must have an ignition device installed on his vehicle for six months that won't allow it to start if his blood-alcohol level is too high.
Floyd was fined $200 and ordered to attend a victim impact panel to hear from people whose family members were killed in drunken driving accidents.
In 2009, Floyd was cited for underage consumption of alcohol in his home state of Minnesota, and pleaded guilty through a hearing officer a month later.
Floyd also was cited for underage drinking in Minneapolis on Jan. 8, 2010. Floyd and Minnesota running back Shady Salamon, who were former high school teammates in St. Paul, Minn., were cited after police were called to a fight involving six to 10 people.
Now Floyd said he's moving forward in a positive direction.
"What motivates me was my family," Floyd said of changing his lifestyle. "Making sure I didn't let them down again. I embarrassed them a lot."