Any private university is just that ....private. That don't have to adhere to state admission they set their own set of rules and policies and that being honor codes, standard of living and ehat not.

BYU ....Morman/LDS ( however they are referred too) they set a high standard....caught living with opp sex your out of there... so they can essentially take away scholarships and what not for not following there institutions guidelines of conduct....gay straight living wiht opp sex drugs alcohol.

Just remember Scholarships are created by foundations, families, students, etc..... so those essentially can be dictated however they feel they want to run scholarships. Federal govt i truly believe gives private univ some latittude in this area .