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Nothing there saying that they have to accept the money or continue to accept the money and if someone violates the universities "ToS" then they have a right to refuse service.
You're bringing up a different issue altogether. This has nothing to do with the scholarship recipient violating any of the uni's rules
It's whether the govt should be able to dictate the terms of a scholarship that is funded with private money. If private individuals want to give their own money for a football scholarship and not require the recipients to play, they should be allowed to. However, this proposal would forbid that.