As has been said by NUProf, this is the same problem that got Geneseo and Buffalo State in trouble. The NCAA has acknowledged that there was no intent to use this for athletic purposes, but the result was still the same. The Hockey coach simply did his job and used the tools at his disposal, provided by the school, to recruit hockey players. The intent was to attract Canadian Students, but it was also a useful tool for the hockey program and so they used it.
The real fault here is in the admissions department not actively enough using the grant to recruit (in a sense of the word) non-athletes. When the athletics dept. is the only one actively using this grant as a recruiting tool, of course most of those benefiting from the grant are going to be athletes! Thus, the hockey team suffers as a result of the short-sightedness of the financial aid and admissions departments.