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I'm pretty sure that just accepting federal funding doesn't mean the school can't tell students what to do. Almost every college and university accepts some funding for research, yet almost every private college restricts where students can live. For example, my school got a lot of research grants ... yet those under 21 who didn't live with mom and dad were required to live on campus (including greek housing).
Maybe state universities can't make restrictions like that, but I have a feeling that if it were illegal for private institutions to do so, it would have been legally challenged a long time ago.
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Alpha Xi Delta
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