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That's fine that the university wants to secure the entire on-campus living to ensure that all rooms are full, but they shouldn't force the fraternities to recruit people to live in the dorm, house, whatever it is.
If students want, they could sign up to live there and be chosen through a lottery like every other college. Or if no one signs up, they can force people to live there by luck of the draw. If they don't want to live near fraternity members, they can move off campus.
It always seems schools want to do things the hard way that goes and makes everyone upset or uncomfortable.
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