Nope, guess again:
1. First, racist speech is constitutionally protected, just as is expression of other contemptible ideas; and universities may not discipline students based on their speech. That has been the unanimous view of courts that have considered campus speech codes and other campus speech restrictions — see here for some citations. The same, of course, is true for fraternity speech, racist or otherwise; see Iota Xi Chapter of Sigma Chi Fraternity v. George Mason University (4th Cir. 1993). (I set aside the separate question of student speech that is evaluated as part of coursework or class participation, which necessary must be evaluated based on its content; this speech clearly doesn’t qualify.)
2. Likewise, speech doesn’t lose its constitutionally protection just because it refers to violence — “You can hang him from a tree,” “the capitalists will be the first ones up against the wall when the revolution comes,” “by any means necessary” with pictures of guns, “apostates from Islam should be killed.”
4. Some people have suggested that the speech may be evidence of discriminatory decisionmaking by the fraternity in admitting members. A university may demand that groups to which it provides various benefits not discriminate in admissions. […] The university might thus be able to discipline students who (a) are involved in a fraternity’s admissions decisions, and (b) can be shown to have denied membership to people based on race, or intentionally tried to communicate to potential members that they would deny them membership that way. I don’t think that a discussion saying that discrimination ought to take place, or even that at some unspecified time it will take place, would suffice to constitute a violation of the antidiscrimination rules, though it might be used as evidence in a future case where discrimination against a particular applicant might be alleged.
Given the legal issues, it will be interesting to see what happens to the students. My guess is that the national fraternity will give them the boot, as is their right, but that the university will not be able to sanction them.
Looks like I called that one wrong:
My guess is that the students will not sue, because now their names are (somewhat) protected by FERPA. As soon as they file a lawsuit, their names will forever be linked with “idiots who sued for right to sing racist songs,” which will be problematic for their future employment.