The state of Colorado is guilty of religious discrimination, according to a federal appellate court. Colorado had provided taxpayer-funded financial aid to students at some religious colleges, but not to students at colleges it considered "pervasively sectarian." The 10th Circuit Court found the state's criteria for what is "pervasively sectarian" and what is not to be discriminatory and to involve "intrusive scrutiny of religious belief and practice."
Colorado's policies had been challenged by Colorado Christian University, lawyers for which argued that Colorado had denied aid to its students because of the "school's affirmation of Christian faith," even though students at Regis University, a Catholic school, were eligible for aid. And even though another school considered "pervasively sectarian" is Boulder's Naropa University, one of the few accredited Buddhist universities in North America.
Naropa University was founded in 1974 by the late Chogyam Trungpa and is home to the Jack Kerouac School of Disembodied Poetics. Naropa seems to me to be a reasonably nonsectarian Buddhist university. From what I can make out from their web site, the only required religion course is a "Contemplative Practice Seminar."
There are thorny separation of church and state issues here about which reasonable people can disagree. But I suspect the real reason Naropa was on the "no fund" list was that it was "pervasively not Judeo-Christian."