This seems to me a pretty straightforward issue, even if many of my secularist brethren will wince. The government has scant interest in discriminating against “religion” in otherwise neutral, government-funded education grant programs. Religion is just one form of irrationality, after all, and even if you assume (as I do) that the Free Exercise Clause of the First Amendment would better have been omitted, it’s not hard to see that such content-specific restrictions targeting the content of the education programs to be funded still would not pass constitutional muster, even considering the speech-related issues alone.
On the other hand, there’s nothing wrong with discriminating against irrationality, and in principle I’d be just fine if a statute specified that “irrational” programs of study (or components of a program of study) will not be funded. The provision could even site certain “religions” as illustrative of the sort of irrationality in question. As a fringe benefit, we’d get rid of PoMo and a whole host of secular nonsense as well.
But, as I said, that’s in principle. In practice, well, I’d be very nervous leaving those sorts of content assessments to any legislature.