Posted by Eugene Volokh:
Government Funding and the Free Speech Clause:
http://volokh.com/archives/archive_2009_05_17-2009_05_23.shtml#1243028778


   Occasionally I see people suggest that private universities are bound
   by the Free Speech Clause if they get government funding, in the form
   of various research grants, student loans, and the like. But that's
   not the law: The Free Speech Clause applies only to decisions by the
   government (including government-run institutions such as public
   universities). It generally does not apply when the government merely
   provides funds to a private institution, that then makes
   speech-restrictive decisions without command or pressure from the
   government. The Court squarely held this in [1]Rendell-Baker v. Kohn
   (1982).

   The government may by statute impose many conditions on the use of
   government funds -- that's what Congress did with Title VI and Title
   IX (which generally bar recipients of federal funds from
   discriminating based on race and sex) and with the drinking age.
   Congress thus probably could mandate that no university which receives
   federal funds may restrict student speech. (I say "probably" because
   there are some twists which I set aside for now.) But Congress hasn't
   enacted such a statute, and it is of course under no obligation to do
   so.

References

   1. http://laws.findlaw.com/us/457/830.html

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