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I disagree, and also, not the governments money so it is none of their business IMHO.
The government is the one placed in charge of disbursing that money - so it is their decision. If the people whose money it is wish not to support the government's decisions, I can certainly understand that, and they are free to cease funding them, and set up another venue.
These students got a scholarship to play football. If they choose to break the terms of that agreement, they have no one to blame but themselves.