Very few (Hillsdale and maybe a couple of others) colleges have refused all sources of federal money so they can remain free. Maybe this is what will get a bunch of colleges off the federal teat.
Probably not. The big universities that do a lot of R&D will still keep their federal funds. THe sceinces and engineering bring in the biggest chuck of federal funds in the form of research grants. Most grad students recieve a stipend for their research work. That stipend is funded by federal grants. Professors doing research spend an inordinate amount of time writing grant proposals. If they get cut of over the don't-ask don't tell policy, there will be a firestorm from the faculty. The science and engineering departments aren't the liberal socialist paradises like the liberal arts are. Plus, these professors will stand up and fight their administrations if their livelihoods are put at risk.