This is a very interesting headline, though, since as I understand it the federal nondiscrimination requirements for universities are tied to the fact that students receive federal funding, and when universities tried to point out that they can't tell whether a student's bank account has been filled by a government loan or some other means they got shot down.
They cannot see if the student is getting financial assistance in the way of food stamps, for example, but the student loan and grant program isn't like that. The federal money goes to the school first, and then anything above and beyond that will be deposited in the student's account. Which means students at this school now can either pay cash or get unsubsidized, non-garunteed funding through the private market, probably needing a cosigner or good credit. Some religious schools opt for this to be free from some types of federal standards. They may have other sorts of financial options available, but I'm not sure.
> Federal financial assistance may be received directly or indirectly.(11) For example, colleges indirectly receive Federal financial assistance when they accept students who pay, in part, with Federal financial aid directly distributed to the students. Grove City College v. Bell, 465 U.S. 555, 564 (1984)
> The Court decided that since Grove City College was only receiving federal funding through the grant program, only that program had to be in compliance. The ruling was a major victory for those opposed to Title IX, as it made many institutions' sports programs outside of the rule of Title IX and, thus, reduced the scope of Title IX.[3] The ruling, however, was short-lived. The Civil Rights Restoration Act was passed in 1988 which extended Title IX coverage to all programs of any educational institution that receives any federal assistance, both direct and indirect.
(emphasis mine)
So, you're just plain wrong as to the state of the law; if the government gives somebody a big pile of cash, and they use it to pay for college, all federal regulations apply to the school. It is not necessary for the school to receive, distribute, or know about the federal money.
This doesn't change the fact that most federal loan and aid money goes directly to the school first. I'm not even sure if one can get the federal loans without working with the school.
It just appears that there are a few grant programs that pay directly to the student. This doesn't change the way the loans are generally processed.
This is a very interesting headline, though, since as I understand it the federal nondiscrimination requirements for universities are tied to the fact that students receive federal funding, and when universities tried to point out that they can't tell whether a student's bank account has been filled by a government loan or some other means they got shot down.