> They just assumed they had permission.

Being given money by the system's owner to do it does sound a bit like permission to me...

i imagine that the people giving the money out and the people who then claim not to have given permission might be different persons. still, a lawsuit on that premise will probably result in a nice settlement.

We could extrapolate that the diplomas given out by said university have no value because some other department could decide after the fact to cancel them :)

the degrees are conferred by the highest authority at the university, the board of regents/trustees. the only reason they would rescind a degree would be evidence of academic fraud/plagiarism in the course of earning the credits for the degree.

That's the theory, yes. But the institution has already shown it can arbitrarily change its mind...