dissenting.
Because David Lipscomb University (“Lipscomb”) is indisputably a “pervasively sectarian” educational institution and because the low-interest loan to Lipscomb through the issuance of the tax-exempt bonds by the Industrial Development Board (“the Board”) amounted to a direct economic benefit in violation of the Establishment Clause of the First Amendment of the U.S. Constitution, I would find that the district court did not err in granting Plaintiffs’ cross-motion for summary judgment, denying the separate motions for summary judgment filed by the Board and the Metropolitan Government (“Metro”) and entering a permanent injunction prohibiting the Board and Metro from issuing additional tax-exempt bonds to Lipscomb or tax-exempt bonds to any pervasively sectarian institution.
As will be conclusively demonstrated below, Lipscomb fits the profile of a pervasively sectarian educational institution by imposing religious restrictions on student admissions and faculty and staff appointments; enforcing obedience to its religious dogma, which is the “supreme purpose” of the University; requiring daily Bible study and attendance at chapel as an integral part of its religious mission; and placing religious limitations on how and what the faculty teach. The low-interest loan of $15 million originated by the Board at Lipscomb’s request constituted a direct economic benefit because it enabled Lipscomb to advance its sectarian mission by funding improvements to the University. Given its pervasively sectarian character, the direct economic benefit to Lipscomb results in excessive governmental entanglement with the religious mission of the University in violation of the Establishment Clause.
BACKGROUND
Before addressing the substantive issues, it is helpful to describe in detail the nature of Lipscomb, a private, not-for-profit religious corporation affiliated with the Churches of Christ, which was founded by David Lipscomb and James Harding in 1891 and originally incorporated under the name of “The Nashville Bible School.”1 Characterizing itself as a “small co-educational liberal arts university” with an enrollment of approximately 2,500 students, Lipscomb states that “its primary mission has been to integrate Christian faith and practice with academic excellence.” Among the objectives of Lipscomb are “[t]o provide the very best in a Christian liberal arts education under the direction of Christian teachers in a distinctly Christian environment ... [t]o train future leaders in the church ... [and] ... [t]o hold up Christ as the example to follow in every field of activity.” (J.A. at 38, 1249.)
According to Lipscomb’s corporate charter and the bylaws of the Board of Directors,
The corporation was organized for the purpose of teaching the word of God and the various branches of the useful *418knowledge, commonly taught in institutions of learning for the following general purposes: the support of any literary or scientific undertaking, as a college or university with power to confer degrees, an academy, a debating society lyceum, the establishment of a library, the support of a historical society, the promotion of painting, music and the fine arts, the support of Board of Trade or Chamber of Commerce or other objects of like nature, the support of public worship, the building of churches and chapels and the maintenance of missionary undertakings.
(J.A. at 805, 829-30). To this end, the bylaws of Lipscomb state that “[t]he President, with the assistance of vice presidents and principals, shall maintain a Christian college that shall perpetuate the high Christian ideals inaugurated by Harding and Lipscomb, the founders of David Lipscomb College, in which the Bible is made the book of most importance.” (J.A. at 830-31.)
As noted in the President’s letter in the 1989-1990 edition of the Student Handbook: “[W]e have a sincere interest in the spiritual values of each student and faculty staff member. Lipscomb has been built on Christian ideas. Daily Bible study and chapel provide direction but only you can make the commitment to grow closer to God.” (J.A. at 293.) Lipscomb’s Faculty Handbook also provides:
The mission of David Lipscomb University is to serve its students so that they may master knowledge and skills appropriate to them and become Christlike in attitude and behavior.
It must be kept firmly in the consciousness of all connected with the institution — administration, faculty, students, and patrons — that Lipscomb is a Christian school. In the original appeal for support, written by David Lipscomb, it was made clear that the Bible was to be the foundation upon which all else would center:
The supreme purpose of the school shall be to teach the Bible as the revealed will of God to man and as the only and sufficient rule of faith and practice, and to train those who will attend in a pure Bible Christianity, excluding from the faith all opinions and philosophies of men, and from the work and worship of the church of God all human inventions and devices. Such other branches of learning may be added as will aid in the understanding and teaching of the Scriptures and as will promote usefulness and good citizenship among men.
(J.A. at 1627.) (emphasis in original.) The Faculty Handbook continues by stating,
This purpose was further set forth in the deed conveying the property on Spruce Street for the use of the school as follows:
... that the property shall be used for maintaining a school in which, in addition to other branches of learning, the Bible as the recorded will of God and the only standard of faith and practice in religion, excluding all human systems and opinions and all innovations, inventions, and devices of men from the service and worship of God, shall be taught as a regular daily study to all who shall attend said school and for no other purpose inconsistent with this object. The condition being herein inserted at the request of the founders of the proposed Bible School, the same is hereby declared fundamental and shall adhere to the premises conveyed as an imperative restriction upon their use so long as the same shall be owned by said Bible School, or its Trustees, and to any and all property which may be purchased with the proceeds of said premises in *419case of sale or reinvestment, as hereinafter provided.
David Lipscomb University is not, therefore, merely an institution which requires every student to take a lesson in the Bible each day; this study is the wellspring from which the university issued.
(J.A. at 1627-28.)
These ideas about the central importance of the Bible are echoed throughout Lipscomb’s catalogues. For example, in the university catalogue for 1988-1989, Lipscomb states:
The Bible has always been considered the most important area of study for all students at DLC [David Lipscomb College]. The founders and those who have followed them have held it to be important that every student study the Bible in a class every day. Whatever one’s major interest or life work, a thorough knowledge of the biblical life principles is needed.
In daily classes the Bible is taught as the inspired word of God. With the Bible itself as the text, students are encouraged to apply the Bible principles of right living to all aspects of personal and professional life.
In view of the daily Bible classes, it can be said that every Lipscomb graduate unofficially “majors in Bible.” Those who formally major in Bible may give special emphasis in one of the following areas: Biblical Languages, Missions, Preaching, Religious Education, or Youth Ministry.
(J.A. at 41-42.) These points are reinforced in the 1990-1991 university cata-logue:
The Daily Bible Requirement
The supreme purpose of David Lipscomb University is “to teach the Bible as the revealed will of God to man and as the only and sufficient rule of faith and practice, and to train those who will attend in a pure Bible Christianity.” To help fulfill this purpose, each regular student must be enrolled in a Bible class each school day and also attend daily chapel services.
Every college or university has a right and even an obligation to be unique and distinctive based upon its individual purpose. Few, if any, other colleges today require students to take regular daily classes in Bible study. Students who choose to attend David Lipscomb University should be interested and supportive of the daily Bible requirement. The university has no authority to suspend this requirement for any student.
(J.A. at 1253.) Lipscomb’s 1990-91 cata-logue further provides:
Although the daily Bible requirement is important enough to be listed as a separate part of each student’s academic program, it is also considered an integral part of the general education program at David Lipscomb College. No body of knowledge or study of any kind is as important as the study of the Bible itself.
(J.A. at 41,1254.)
Accordingly, taking and passing a daily Bible class is a “fundamental requirement for attendance” at Lipscomb. (J.A. at 39-40.) As set forth in Lipscomb’s student bulletin for 1991-92:
The Bible has always been considered the most important area of study for all students at David Lipscomb University. The founders, and those who have followed them, have held it to be important that every student study the Bible. Whatever their major interest or life work, a thorough knowledge of Biblical principles is needed.
In daily classes, Bible is taught as the inspired word of God. Students are en*420couraged to apply the Bible principles of right living to all aspects of personal and professional life.
(J.A. at 836-37, 1260.) These ideas were continually expressed in the editions of the Student Handbook from 1988 through 1992:
Because the Bible is the heart of Lipscomb’s curriculum, every regular student studies the Bible every school day. Offerings in the Department of Bible are arranged so that a student can, in four years, have exposure to the entire Bible.
Any student who fails Bible is automatically placed on probation for the succeeding semester. Probation must be removed by passing each Bible course carried during the semester of probation. Failure to meet this requirement means that the student will be dropped at the end of the semester.
(J.A. at 303, 1189, 1212, 1235.) As explained by Dr. Joe Mac Lynn, the head of Lipscomb’s Bible Department, each student is required to have two credit hours of Bible each semester in order to graduate from Lipscomb. (J.A. at 1504-5.) From 1988 until September 1992, approximately 100 undergraduate students were on “Bible probation.” (J.A. at 834.) As noted in the Student Handbooks, students who do not pass every Bible course carried while on probation are subject to dismissal from the school.
In addition to daily Bible study, Lipscomb also requires every full-time student to attend chapel each school day. (J.A. at 833.) As stated in Lipscomb’s Faculty Handbook:
Chapel
The heart of each day’s activities at David Lipscomb University is the chapel service. It is here that the entire Lipscomb family gains strength and inspiration for the tasks of the day. Since attendance at chapel is compulsory for all students, it is expected that each faculty member will attend chapel regularly. No arrangements should be made which require regular chapel absences of one or more times each week without prior written approval of the dean.
(J.A. at 1401.) (emphasis in original.) As set forth in the editions of the Student Handbook from 1988 through 1992, a student with eleven absences from chapel during a semester is placed on “chapel probation.” (J.A. at 303,1189-90, 1212-13, 1235-36.) From 1990 through 1992, an average of 40 to 60 students were on “chapel probation” each semester. (J.A. at 833, 1463.) The Student Handbooks also provide that “[i]f flagrant disregard for chapel attendance persists, a student is subject to immediate suspension.” (J.A. at 304.) In his deposition, Dr. Dennis Loyd, the Dean of Students at Lipscomb, testified that every full-time student “knows he goes to chapel,” and that failure to do so results in dismissal. (J.A. at 1455-59.)
As stated in the bylaws of the Board of Directors, each director at Lipscomb must be a member of the Churches of Christ in good standing in the congregation. (J.A. at 110.) The Board of Directors elects the president to be its chief executive officer in charge of “its business and Christian education affairs.” (J.A. at 115.) The bylaws also provide that “great care should be exercised in the selection and development of [ ] teaching personnel.” (J.A. at 116.) Moreover, all personnel, with the exception of employees of its services, building and grounds departments, shall be members in good standing of the Churches of Christ. (J.A. at 832.) Lipscomb also reserves the right under Title VII of the Civil Rights Act of 1964 (as amended) to discriminate, “where it is necessitated by the specific religious tenets held by the institution.” (J.A. at 834,1250.)
*421In addition, Lipscomb President Harold Hazelip acknowledged in his deposition testimony that all of its faculty must be members in good standing of the Churches of Christ, and that leaving the church is grounds for termination of employment. (J.A. at 1167, 1169.) In a letter to Nashville Mayor Boner opposing the bond issue, Norman Parks, the former dean of Lipscomb, remarked:
No person can be employed at Lipscomb who is not a member of the mainline Church of Christ. He cannot be a premillennialist or believe that instrumental music is acceptable for worship of God. He must believe that a divorced person cannot remarry and continue in church. He must believe that a woman cannot teach a class in religion to men.
(J.A. at 1142.) In this regard, Dr. Lynn, the head of Lipscomb’s Bible Department, testified in his deposition that a divorced teacher may be allowed to remain as a teacher at the university, but “[a] person who divorces and remarries during the [ ] employment relationship to [sic] the University would be subject to discipline or to dismissal.” (J.A. at 1539.) According to Dr. Susan Dennison Sinclair, she was informed by the department chairman when she was hired as an adjunct professor in the English Department for one semester in 1990 that “he would not be allowed to recommend me based on various personal questions, one of them being the fact that my husband and I at that time were separated.” (J.A. at 1572.) Dr. Sinclair also testified that the chairman of the English Department informed her when she was hired that “there might be some problems, with the requirements of the university” by her failure to answer the question on the employment application concerning drinking. (J.A. at 566-67.)
Lipscomb also imposes religious restrictions on how and what the faculty teach. Specifically, Lipscomb admits that it does not subscribe to the American Association of University Professors’ (“AAUP”) Statement of Principles on Academic Freedom.2 In contrast, Lipscomb’s Faculty Handbook states:
In the final analysis, the worth of any educational institution is determined by its faculty. It is of special importance in the Christian university that every teacher be first dedicated to Christ and His truth, demonstrating those qualities of heart and life which will inspire young people to love the Lord and strive to please Him. This devotion must be accompanied by sound scholarship, aware*422ness of student needs, and a determined desire to serve.
(J.A. at 1305.) Under the subheading of “Academic Freedom,” the Faculty Handbook adds:
Each member of the Lipscomb faculty is committed both by personal conviction and by contract to the purposes and ideals of the institution as set forth by the founders and Board of Directors. Within this framework each teacher is free to pursue and teach truth in his/her respective field of learning. Since truth is consistent everywhere, this basic commitment makes possible academic freedom without the necessity of a formal statement.
(J.A. at 1305.) According to Dr. Sinclair, who has had a long association with Lipscomb in addition to teaching there, the administration at Lipscomb directed members of the faculty to teach certain religious doctrines or views in courses given in the Biology and Physics Departments, where faculty members are “instructed to teach creationism.” (J.A. at 1616-17.) In her affidavit, Dr. Sinclair also stated:
5. Those who are not familiar with the church of Christ have difficulty understanding the restrictive nature of its beliefs. The Bible is taken very literally and very restrictively. For example, women are not allowed to hold any leadership positions of any kind. Women are not allowed to speak in any worship service. Women are not allowed to lead singing, to make announcements or to teach in any group where men are present. Women are not allowed to go to business meetings of the church. Women have no vote in any meetings; women have no say in how the money collected is spent. Women are taught to “be in submission” at home and in the church.
6. In order to see how this doctrine affects teaching and academic freedom at Lipscomb, I recall a speech Hollis Todd, professor of the sociology department at Lipscomb and an elder at my church gave on November 22, 1992. (I took notes on it because it was a few days after my discovery deposition in the case of Steele v. Industrial Development Board, et al. and I was thinking about these issues.) He told how he required the students in his David Lipscomb University sociology class called “The Family” to answer a question on Ephesians 5. The question was whether they accepted the doctrine that a man must be “head” of the wife. He was shocked and upset that one of his students had once actually said she didn’t agree with the scripture. He cited this incident as proof of “the rising tide of immorality.” He did not state whether he graded the student poorly.
(J.A. at 622.)
During the years from 1990 to 1992, at the time of the issuance of the bonds, more than 77% of the undergraduate students at Lipscomb were members of the Churches of Christ. (J.A. at 837, 1181.) According to the affidavit of W. Craig Bledsoe, the Provost at Lipscomb since 1997, 78.97% of the student body indicated that they were members of the Churches of Christ in 1991, while 71.42% of the student body so indicated in 1997. (J.A. at 502.) Student applications for admission to Lipscomb during these years “required a character reference from a minister, youth minister or leader at church,” without specifying the denomination of the church or the religion. (J.A. at 837.) As expressed in a brochure from Lipscomb, “[o]ne common thread that binds students together is their commitment to Christ. At Lipscomb a student’s love for the Lord is strengthened by this special association with other students, the majority of whom share the same spiritual values.” (J.A. at 1635.) In *423his affidavit, Bledsoe also stated that “there are numerous other religions represented in the student body including, for example, Buddhism, Lutheran, Muslim, Russian Orthodox, Hindu, Catholic, Mormon, Baptist, and Nazarene.” (J.A. at 502). In his supplemental affidavit, Bled-soe averred that “Lipscomb does not discriminate against students on the basis of religion.” (J.A. at 775.) Nevertheless, Dr. Sinclair testified in her deposition that students were pressured to become members of the Churches of Christ, particularly during chapel service. (J.A. at 1606-07.) Moreover, while Lipscomb provided its students with a list of local churches in the community, it only named those affiliated with the Churches of Christ. (J.A. at 835-36.) Lipscomb also acknowledges that it prohibits students from dancing, consuming alcohol, using tobacco, among other things, because it regards such conduct as being “un-Christian conduct.” (J.A. at 308-309, 835,1191-92,1472-74.)
In response to recommendations made by the Southern Association of Colleges and Schools, Lipscomb undertook a major development project in the early 1990s to expand and renovate its campus to accommodate an increase in undergraduate enrollment to 3,000. To fund the project, Lipscomb applied for a $15 million, low-interest loan from the Board.3 Lipscomb requested funding to construct and equip a new library; renovate and convert the old library into administrative offices; construct an intramural building (or student activity center), an intramural field, four new tennis courts, and a baseball stadium; construct an addition to the Swang Business Center; make parking, landscaping and walkway improvements; and acquire computer and fiber optic equipment.
At a public meeting on April 10, 1990, the Board approved Lipscomb’s request for the loan, which was financed by the issuance of $15 million in tax-exempt industrial development bonds, pursuant to the Board’s authority under Tenn.Code Ann. § 7 — 53—101 (11)(A)(vii). After another public hearing on May 30, 1990, the Board formally approved the issuance of the bonds. On May 31, 1990, Nashville Mayor Bill Boner approved the issuance of the bonds, as required for tax-exempt status under 26 U.S.C. § 147(f), thus certifying that the bonds served a public purpose.
The tax-exempt bonds were then sold to private investors (bondholders), and the proceeds from the bonds were loaned to Lipscomb, pursuant to the loan documents. According to the loan agreement, Lipscomb was not to use the project funds for sectarian instruction or religious worship. Lipscomb is also obligated to pay all sums due on the bonds. In January of 1991, the *424bonds were replaced by revenue refunding bonds titled “Educational Facilities Revenue Refunding Bonds, Series 1991.”
Defendant Sovran Bank, as trustee for the bondholders, was assigned the loan documents. Sovran Bank provided the principal security for the bonds through a $15,969,453 irrevocable letter of credit for the account of Lipscomb to Sovran Bank, N.A. as trustee for the bondholders. Additional security was provided by a promissory note and loan agreement entered into by Lipscomb and the Board.
Plaintiffs are state and local taxpayers residing in Davidson County, Tennessee, who objected to the issuance of the bonds at public hearings and meetings of the Board held on April 10, April 16, and May 30, 1990.4 At the meetings, Plaintiffs or their representatives complained that the issuance of the tax-exempt bonds for Lipscomb provided governmental support to a pervasively sectarian institution in violation of the Establishment Clause of the First Amendment of the U.S. Constitution. On May 30, 1991, Plaintiffs, as municipal taxpayers, commenced the instant action, challenging the validity of the Board’s action in issuing tax-exempt revenue bonds for the benefit of Lipscomb.
Eventually, on October 9, 1998, Metro and Lipscomb separately moved for summary judgment, alleging that the issuance of the tax-exempt revenue bonds did not violate the Establishment Clause. In support of their respective motions for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure, both Metro and Lipscomb submitted separate statements of the undisputed material facts on October 9, 1998 and October 16, 1998, respectively. Plaintiffs responded to Defendants’ statements of the undisputed material facts and filed documents in opposition to Defendants’ motions for summary judgment. Plaintiffs also filed a statement of additional undisputed material facts in opposition to Defendants’ motions on November 9, 1998. Both Defendants then responded to Plaintiffs’ statement of additional undisputed material facts on November 20,1998 and December 2, 1998, respectively.
At oral argument on May 10, 2000, the district court requested that Plaintiffs submit a cross-motion for summary judgment. Pursuant to the district court’s order, Plaintiffs filed a motion for summary judgment on May 30, 2000, alleging that the issuance of the tax-exempt revenue bonds to Lipscomb violated the Establishment Clause because Lipscomb is so pervasively sectarian that a substantial portion of its functions is subsumed in its religious mission, and that the $15 million dollars in tax-exempt revenue bonds had the impermissible effect of promoting religion as a matter of law. In support of their motion for summary judgment, Plaintiffs submitted a statement of the undisputed facts. Thereafter, on July 3, 2000, Lipscomb submitted its verified response to Plaintiffs’ statement of undisputed material facts in support of their motion for summary judgment.
On October 24, 2000, the district court entered a memorandum and order granting Plaintiffs’ cross-motion for summary judgment and denying Lipscomb and Metro’s respective motions for summary judgment. The district court also issued a permanent injunction enjoining the Board and Metro from issuing any additional tax-exempt revenue bonds for the benefit of Lipscomb or any other pervasively sectari*425an institution. The district court further awarded Plaintiffs’ nominal damages in the amount of $1.00 each and authorized attorneys’ fees for Plaintiffs. Defendants then filed timely notices of appeal. Subsequently, Defendants filed a motion to stay further proceedings on the matter of attorneys’ fee pending this appeal. On October 31, 2000, the district court granted the motion to stay proceedings on the attorneys’ fee issue.
Metro also asked for a stay of the permanent injunction issued by the district court enjoining the Board and the Metro from issuing any additional tax-exempt revenue bonds for the benefit of Lipscomb or any other pervasively sectarian institution. On July 13, 2001, the district court denied Metro’s motion for a stay pending appeal. Thereafter, in a motion filed on August 13, 2001, Metro appealed the district court’s denial of its motion for a stay pending appeal. In an order entered on September 25, 2001, this Court denied the motion for a stay pending appeal.
DISCUSSION
At the outset, it should be noted that Plaintiffs challenge only the constitutionality of the Tennessee statute as applied, which authorized the Board to issue tax-exempt bonds to Lipscomb or any other pervasively sectarian institution. Thus, the issue squarely presented on appeal is whether the low-interest loan by the Board to Lipscomb funded through the issuance of the tax-exempt bonds violates the Establishment Clause because Lipscomb is a pervasively sectarian educational institution and the loan amounts to direct state aid.
The point of departure for analyzing whether the low-interest loan to Lipscomb through the issuance of the tax-exempt bonds by the Board violated the Establishment Clause is the test set forth in Lemon v. Kurtzman, 403 U.S. 602, 612-13, 91 S.Ct. 2105, 29 L.Ed.2d 745 (1971), as refined by the Court in Agostini v. Felton, 521 U.S. 203, 232-33, 117 S.Ct. 1997, 138 L.Ed.2d 391 (1997), which merged the excessive government entanglement prong with the “primary effect” analysis. As the majority opinion notes, the Lemon test, as reformulated by Agostini continues to have vitality. See Zelman v. Simmons-Harris, — U.S. -, 122 S.Ct. 2460, 2476, — L.Ed.2d - (2002) (O’Connor, J. concurring opinion). In the present case, the question before us concerns whether the governmental action satisfies the “primary effect” test. Under this test, the Court in Agostini stated that the governmental aid is permissible if “it does not result in governmental indoctrination; define its recipients by reference to religion; or create an excessive entanglement.” Id. at 234, 117 S.Ct. 1997. In the matter before us, the specific issue is whether the governmental aid results in excessive entanglement. In assessing whether there is excessive entanglement, the Court in Agostini stated that “we have looked to ‘the character and purposes of the institutions that are benefited, the nature of the aid that the State provides, and the resulting relationship between the government and religious authority.’ ” Id. at 232, 117 S.Ct. 1997 (quoting Lemon, 403 U.S. at 615, 91 S.Ct. 2105).
On appeal, Lipscomb first argues that the district court’s grant of summary judgment in favor of Plaintiffs was erroneous because it rested upon a finding that Lipscomb is a pervasively sectarian educational institution. According to Lipscomb, “whether an institution is ‘pervasively sectarian’ is no longer a factor to be considered by the courts in these kinds of cases.” Lipscomb’s Br. at 7. However, as the majority opinion recognizes, the pervasively sectarian test has not been abandoned. In *426Johnson v. Econ. Dev. Corp. of County of Oakland, 241 F.3d 501, 510 n. 2 (6th Cir.2001), this Court pointed out:
The principle expressed in Hunt v. McNair, 413 U.S. 734, 93 S.Ct. 2868, 37 L.Ed.2d 923 (1973), that government aid in the form of tax exempt revenue bonds of the type involved in this case violates the Establishment Clause — when provided to pervasively sectarian institutions — has not been disavowed, at least to my knowledge, by any subsequent majority opinion of the Supreme Court. Accord Agostini v. Felton, 521 U.S. 203, 233, 117 S.Ct. 1997, 138 L.Ed.2d 391 (1997) (recognizing that under the Establishment Clause, the court must consider “ ‘the character and purposes of the institutions that are benefitted’ ... (e.g., whether the religious institutions were ‘predominantly religious’ ”)) (citing Hunt, 413 U.S. at 734-44, 93 S.Ct. 2868).
241 F.3d at 510 n. 2 (parallel citations omitted.) Although the majority notes that the Court questioned “[t]he vitality of the pervasively sectarian test” in Mitchell v. Helms, 530 U.S. 793, 120 S.Ct. 2530, 147 L.Ed.2d 660 (2000), we noted in Johnson that “it is Justice O’Connor’s opinion [in Mitchell ], which does not abolish the distinction between ‘pervasively sectarian’ and ‘sectarian’ institutions and which expressly declines to adopt Justice Thomas’ expansive view, that is controlling upon this Court.” Id.
Alternatively, Lipscomb claims that even if the pervasive sectarian test remains relevant, the district court’s decision must be vacated and remanded for an evidentiary hearing because the court improperly “viewed ambiguous facts in a light least favorable to the non-moving party” in granting summary judgment in favor of Plaintiffs. Lipscomb’s Br. at 7, n. 4. There is no merit to this claim because the district court based its decision on the undisputed facts in the record, which established as a matter of law that Lipscomb is a pervasively sectarian educational institution and that the loan transaction amounted to a direct economic benefit for Establishment Clause purposes.
The profile of a pervasively sectarian educational institution
In evaluating whether Lipscomb is a pervasively sectarian institution, our attention should be directed in the first instance to Hunt v. McNair, 413 U.S. 734, 93 S.Ct. 2868, 37 L.Ed.2d 923 (1973), since it is the only case dealing with the precise issue at hand that yielded a majority opinion. In Hunt, the Supreme Court also addressed the issue of state aid to a religious school in a challenge to the validity of the South Carolina Educational Facilities Authority Act (“the Act”), under which revenue bonds were issued to the Baptist College at Charleston, South Carolina, a Baptist-affiliated college. Through the issuance of the revenue bonds, the Act provided assistance to higher educational institutions in constructing and financing projects, such as buildings, facilities, and site preparation, specifically excepting “any facility used or to be used for sectarian instruction or as a place of religious worship nor any facility which is used or to be used primarily in connection with any part of the program of a school or department of divinity for any religious denomination.” Id. at 736, 93 S.Ct. 2868.
Applying the factors set forth in Lemon, the Court in Hunt held that the Act did not violate the Establishment Clause, finding in pertinent part that the statute did not have the primary effect of advancing or inhibiting religion insofar as the college did not have a significant sectarian orientation and the projects were limited to those with a secular purpose. In Hunt, the Supreme Court noted:
*427Aid normally may be thought to have a primary effect of advancing religion when it flows to an institution in which religion is so pervasive that a substantial portion of its functions are [sic] subsumed in the religious mission or when it funds a specifically religious activity hr an otherwise substantially secular setting.
Id. at 743, 93 S.Ct. 2868. The Court in Hunt concluded that the aid did not go to a pervasively sectarian institution, nor to fund specifically religious activities, and thus would not “place the Authority in the position of providing aid to the religious as opposed to the secular activities.” Id. at 744, 93 S.Ct. 2868. Although Hunt did not outline a test for identifying a pervasively sectarian institution, the Court found that the Baptist college in question was not pervasively sectarian inasmuch as “there are no religious qualifications for faculty membership or student admission, and that only 60% of the College student body is Baptist, a percentage roughly equivalent to the percentage of Baptists in that area of South Carolina.” 413 U.S. at 743-44, 93 S.Ct. 2868.
Notwithstanding the absence in Hunt of an explicit test for identifying a pervasively sectarian educational institution, the plurality opinion in Roemer v. Bd. of Public Works of Md., 426 U.S. 736, 96 S.Ct. 2337, 49 L.Ed.2d 179 (1976) set forth a profile of a pervasively sectarian educational institution for evaluating Establishment Clause claims. In Roemer, the Court considered an Establishment Clause challenge to the constitutionality of a Maryland statute providing public aid in the form of grants (“Sellinger grants”) to colleges affiliated with the Roman Catholic Church. In Roemer, the plurality noted that “the focus of the debate” concerned whether the grant program had the primary effect of advancing religion and creating excessive church-state entanglement. As to the primary-effect question, the plurality in Roemer noted that “Hunt requires (1) that no state aid at all go to institutions that are so ‘pervasively sectarian’ that secular activities cannot be separated from sectarian ones, and (2) that if secular activities can be separated out, they alone may be funded.” Id. at 755, 93 S.Ct. 2868. In determining whether an institution was “pervasively sectarian,” the plurality opinion in Roemer noted that it was necessary to “paint a general picture of the institution, composed of many elements.” Id. at 758, 96 S.Ct. 2337. Summarizing the elements of a sectarian profile set forth in the Court’s majority opinion in Comm. for Public Educ. and Religious Liberty v. Nyquist, 413 U.S. 756, 767-68, 93 S.Ct. 2955, 37 L.Ed.2d 948 (1973), the plurality in Roemer stated:
The elements of the “profile” were that the schools placed religious restrictions on admission and also faculty appointments; that they enforced obedience to religious dogma; that they required attendance at religious services and the study of particular religious doctrine; and that they were an ‘integral part’ of the religious mission of the sponsoring church; that they had religious indoctrination as a ‘substantial purpose’; and that they imposed religious restrictions on how and what the faculty could teach.
Roemer, 426 U.S. at 753 n. 18, 96 S.Ct. 2337 (citing Nyquist, 413 U.S. at 767-68, 93 S.Ct. 2955).
In light of the views expressed in the majority opinions in Hunt and Nyquist, the proper starting point for evaluating the Establishment Clause challenge in this case is to adopt the profile for a pervasively sectarian educational institution stated by the plurality in Roemer, as this most closely adheres to Supreme Court prece*428dent expressed in majority opinions on this topic. See Agostini, 521 U.S. at 237, 117 S.Ct. 1997 (noting that “the Court of Appeals should follow the case which directly controls, leaving to this Court the prerogative of overruling its own decisions”).
It should be noted that this approach accords with that taken by the Fourth Circuit in Columbia Union Coll. v. Clarke, 159 F.3d 151 (4th Cir.1998) (“Columbia Union I”), which adopted a four-factor test that is essentially a restatement of the Supreme Court’s profile of a pervasively sectarian educational institution. In Columbia Union I, the Fourth Circuit identified four “general areas of inquiry” in determining whether a school is pervasively sectarian: “(1) does the college mandate religious worship; (2) to what extent do religious influences dominate the academic curriculum, (3) how much do religious preferences shape the college’s faculty hiring and student admission processes, and (4) to what degree does the college enjoy ‘institutional autonomy’ apart from the church with which it is affiliated.” Id. at 163. Although the Fourth Circuit asserted that a college is not pervasively sectarian unless it possesses a “great many” of the characteristics identified in the four-factor test, 159 F.3d at 163, there is nothing clearly stated in prior Supreme Court precedent to the effect that a pervasively sectarian instruction must possess “a great many” of the relevant characteristics; rather, the focus of the inquiry is whether religion so permeates the secular education functions provided by a religious-affiliated educational institution that its religious and secular educational functions are in fact inseparable. Further, I take issue with the statement by the Fourth Circuit in Columbia Union I that “because the Supreme Court has never held any institution of higher education to be ‘pervasively sectarian,’ we lack even a clear ‘general picture’ of a ‘pervasively sectarian’ college or university.” 159 F.3d at 163. In my view, the general profile of a pervasively sectarian institution is not as difficult to discern from Supreme Court jurisprudence as the Fourth Circuit purports it to be. Although the Fourth Circuit correctly recognized that “[njeither the Supreme Court, nor any circuit court to our knowledge, has ever found a college to be pervasively sectarian,” id. at 169, it is clear that the Supreme Court certainly left open this possibility. See Hunt, 413 U.S. at 743, 93 S.Ct. 2868 (citing Tilton v. Richardson, 403 U.S. 672, 682, 91 S.Ct. 2091, 29 L.Ed.2d 790 (1971)); see also Va. Coll. Bldg. Auth. v. Lynn, 260 Va. 608, 538 S.E.2d 682 (Va.2000) (applying the elements of the Roemer test to find that Regent University, created under the auspices of the Christian Broadcasting Network, Inc., is a pervasively sectarian institution).
Lipscomb fits the profile of a pervasively sectarian educational institution
Viewing the undisputed facts, the district court properly concluded that Lipscomb is, as a matter of law, a pervasively sectarian educational institution. First, the record indicates that Lipscomb places religious restrictions on admission, and that more than 70% of the student body belongs to the Churches of Christ. Lipscomb also places religious restrictions on faculty and staff appointments, requiring that all personnel, with limited exceptions, be members in good standing of the Churches of Christ. Specifically, all members of Lipscomb’s faculty and staff are expected to attend daily chapel and adhere to church doctrines. Further, faculty members are contractually bound to promote the beliefs of the Churches of Christ, both in and out of the classroom, and if any member leaves the church, it is an immediate ground for termination of employment. As noted by the district court, *429Lipscomb also reserves the right under Title VII of the Civil Rights Act of 1964 (as amended) to discriminate, “where it is necessitated by the specific religious tenets held by the institution.”
Second, Lipscomb enforces obedience to its religious dogma, directing that the Bible be taught “every school day to every student enrolled ... by teachers who are sound in the faith and faithful in their lives to its sacred truths.” According to Lipscomb, its “supreme purpose” is “to teach the Bible as the revealed will of God to man and as the only and sufficient rule of faith and practice, and to train those who will attend in a pure Bible Christianity.”
Third, Lipscomb requires its students to participate in daily Bible study and attendance at chapel. According to Lipscomb, “[t]he university has no authority to suspend [the daily Bible] requirement for any student.” As the district court found, all students must take at least one Bible class every day of each semester and are required to take at least one course from each of the following four categories: The Gospels, The Church, Old Testament, and Defense of the Faith. According to Lipscomb, the Bible is the inspired word of God, and students are encouraged to apply Biblical principles in conducting the affairs of their personal and professional lives. Students are also required to pass Bible courses, and the failure to do so results in being placed on “Bible probation,” which could lead to expulsion. From 1988 to 1992, approximately 100 students were placed on Bible probation. In addition, students are required to attend chapel every school day, and the failure to do so may lead to being placed on “chapel probation.”
Fourth, attendance at chapel and the study of the Bible at Lipscomb are an “integral part” of the religious mission of the Churches of Christ. This is made clear repeatedly throughout Lipscomb’s Faculty and Student Handbooks, as well as its university catalogues.
Fifth, religious indoctrination is a “substantial purpose” at Lipscomb. As set forth in Lipscomb’s corporate charter and bylaws of the Board of Directors, “[t]he corporation was organized for the purpose of teaching the word of God and the various branches of the useful knowledge, commonly taught in institutions of learning for the following general purpose: ... the support of public worship, the building of churches and chapels and the maintenance of missionary undertakings.” Moreover, as the district court noted, “[t]he land on which the construction projects funded by the bond proceeds were undertaken is subject to restrictive covenants that require that the property be used exclusively to further the religious mission of the institution so long as the property is owned by Lipscomb.” Steele v. Indus. Dev. Bd. of Metro. Gov. of Nashville and Davidson County, 117 F.Supp.2d 693, 710 (M.D.Tenn.2000).
Sixth, Lipscomb imposes religious restrictions on how and what the faculty teach. As Lipscomb acknowledges, it does not subscribe to the AAUP’s Statement of Principles on Academic Freedom. Specifically, there was unrebutted testimony that Lipscomb instructs the faculty in the Biology and Physics Departments , to “teach creationism.” By Lipscomb’s own admission, the religious tenets of the Churches of Christ are designed to permeate every facet of the University, including classroom instruction in subjects that are considered non-religious or nonsectarian.
Here, the record shows that Lipscomb satisfies all the elements of a sectarian educational institution profile, conclusively demonstrating that religion pervades it to such an extent that “its functions are subsumed in the religious mission.” Hunt, *430413 U.S. at 743, 93 S.Ct. 2868. Accordingly, there is no genuine issue of material fact about whether Lipscomb is a pervasively sectarian educational institution.
Lipscomb is clearly distinguishable from educational institutions found not to be pervasively sectarian
As an educational institution, Lipscomb is clearly distinguishable from those higher educational institutions that the Supreme Court has found not to be pervasively sectarian. For example, in Tilton v. Richardson, 403 U.S. 672, 91 S.Ct. 2091, 29 L.Ed.2d 790 (1971), the Supreme Court found that a direct federal grant awarded pursuant to the Higher Education Facilities Act of 1963 to four colleges and universities affiliated with the Roman Catholic Church for the construction of academic facilities devoted to secular purposes did not violate the Establishment Clause, except for the section of the Act that limited federal interest in the facilities to a period of twenty years because it allowed the unconstitutional contribution of valuable property to a religious institution, and could be “used to promote religious interests.” 403 U.S. at 683, 91 S.Ct. 2091. The colleges in Tilton were described in the following terms:
All four schools are governed by Catholic religious organizations, and the faculties and student bodies at each are predominantly Catholic. Nevertheless, the evidence shows that non-Catholics were admitted as students and given faculty appointments. Not one of these four institutions requires its students to attend religious services. Although all four schools require their students to take theology courses, the parties stipulated that these courses are taught according to the academic requirements of the subject matter and the teacher’s concept of professional standards. The parties also stipulated that the courses covered a range of human religious experiences and are not limited to courses about the Roman Catholic religion. The schools introduced evidence that they made no attempt to indoctrinate students or to proselytize. Indeed, some of the required theology courses at Alber-tus Magnus and Sacred Heart are taught by rabbis. Finally, as we have noted, these four schools subscribe to a well-established set of principles of academic freedom, and nothing in this record shows that these principles are not in fact followed. In short, the evidence shows institutions with admittedly religious functions but whose predominant higher education mission is to provide their students with a secular education.
Id. at 686-687, 91 S.Ct. 2091. Unlike Til-ton, where the theology courses at the colleges affiliated with the Roman Catholic Church were “taught according to the academic requirements and the teacher’s concept of professional standards,” without attempting “to indoctrinate students or to proselytize,” the religion classes at Lipscomb are Bible classes, not theology classes. At Lipscomb, Bible classes are taught as “the revealed will of God to man and as the only and sufficient rule of faith and practice, and to train those who will attend in a pure Bible Christianity, excluding from the faith all opinions and philosophies of men, and from the work and worship of the church of God all human inventions and devices,” except those that “will aid in the understanding and teaching of the Scriptures.”
Lipscomb also clearly differs from the Baptist college in Hunt. As already noted, the Baptist College at Charleston was not found to be a pervasively sectarian educational institution based upon the fact that it did not impose religious qualifications on its faculty and staff and given that the percentage of the student body rough*431ly reflected the same percentage of Baptists in the area. Unlike the college in Hunt, which did not hire faculty on the basis of religion, apart from those teaching in the theology departments, Lipscomb requires that its faculty be members in good standing of the Churches of Christ. Further, the fact that the student body at Lipscomb is largely affiliated with the Churches of Christ reflects Lipscomb’s placement of religious restrictions on student admissions.
Lipscomb is also clearly distinguishable from the Roman Catholic colleges in Roemer, which were “characterized by a high degree of institutional autonomy” from “their formal affiliation with the Roman Catholic Church.” Roemer, 426 U.S. at 755, 96 S.Ct. 2337. By contrast, Lipscomb’s “supreme purpose” is “to teach the Bible as the revealed will of God to man and as the only and sufficient rule of faith and practice, and to train those who will attend in a pure Bible Christianity.” Further, unlike the colleges in Roemer, Lipscomb does not subscribe to the AAUP’s Statement of Principles on Academic Freedom. Moreover, unlike the colleges in Roemer, where attendance at religious exercises was not required and where spiritual development was encouraged as a “secondary objective,” Lipscomb requires attendance at religious service, placing those who fail to attend on “chapel probation,” and clearly promotes spiritual development as the primary objective of the institution. While the colleges in Roemer gave mandatory religion and theology courses taught “primarily by Roman Catholic clerics,” those courses only supplemented “a curriculum covering ‘the spectrum of a liberal arts program.’ ” Roemer, 426 U.S. at 756, 96 S.Ct. 2337. In contrast, the Bible classes at Lipscomb are central to the mission of the school, and the failure to pass a Bible course results in a student being placed on “Bible probation,” which subjects the student to dismissal from the school if he or she does not pass every Bible course taken while on Bible probation. Lipscomb thus clearly stands separate and apart from the higher educational institutions that the Supreme Court has found not to be pervasively sectarian.
It should also be noted that Lipscomb is markedly different from the religious academy in Johnson that this Court found not to be pervasively sectarian. In Johnson, this Court described the religious academy in the following terms:
As to the nature of the institution, as with any religioúsly affiliated school, the Academy pledges its allegiance to its faith. Nevertheless, the facts establish that the Academy is not a pervasively sectarian institution. The Academy’s Restated Articles of Incorporation provide that the school’s purpose is to “conduct an independent Catholic school from pre-school through and including the 12th grade, wherein the arts and sciences, and other forms of primary and secondary learning are taught, and diplomas and honors therein conferred: while maintaining a philosophy consonant with that of the network of the Sacred Heart schools of which it is a member.” (J.A. at 66.) The Academy’s curriculum and requirements provides that
[e]very student at [the Academy] receives intensive training in the basic academic skills of English, Mathematics, History, Foreign Language and Science. Art, Music, Drama, Forensics, Theology and Computer Science are essential parts of this program. [The Academy] offers each student a full Physical Education Program designed to develop a sense of sportsmanship, a-respect for physical fitness and an awareness of the enjoyment derived from athletic endeavors.
*432(J.A. at 154.) A review of the course descriptions and the subjects covered for each of the courses offered at the Academy, with the exception of the Religion Department, demonstrates that the Academy does not interject religion into every aspect of its curriculum. Moreover, there are no religious requirements for membership on the Academy’s Board of Trustees. Non-Catholics have served, and currently serve, on the Board.
In addition, the Academy does not discriminate on the basis of race, color, creed, or national origin in its admissions process, nor does it give preference in admission to Roman Catholics. Furthermore, the Academy does not discriminate on the basis of race, color, or national origin in any of its educational policies, scholarship and loan programs, athletic or extracurricular activities, or other-school administered programs. As of the date of the issuance of the bonds at issue, 135 of the 366 (non-preschool) students at the Academy, or 37%, were not Catholic. And as of the date of the stipulation, 34% of the students were not Catholic. The facts indicate that faiths represented in the Academy student body include non-Catholic Christian, Jewish, Islamic, Shinto and others. Finally, the Academy does not discriminate on the basis of race, color, creed or national origin in the hiring of its employees. The Academy has a teaching faculty of 60, of whom five are members of religious orders. There is no religious-affiliation requirement or preference for the Academy’s teachers, and the school does not inquire as to the religious affiliation of prospective faculty members.
Johnson, 241 F.3d at 516-17. Most striking, Lipscomb, unlike the academy in Johnson, interjects religion into virtually all aspects of its institutional life. Further, unlike the school in Johnson, Lipscomb reserves the right under Title VII of the Civil Rights Act of 1964 to discriminate in the hiring of faculty and staff on the basis of religion.
Lipscomb is also distinguishable from Columbia Union College, the educational institution affiliated with the Seventh Day Adventist Church that the Fourth Circuit did not regard as a pervasively sectarian educational institution. See Columbia Union Coll. v. Oliver, 254 F.3d 496 (4th Cir.2001) (“Columbia Union II”). In Columbia Union II, the Fourth Circuit stated:
The district court respected fully the majority’s order of remand in Columbia Union I. Working through the four factors in this case, the court found that although Columbia Union had a mandatory worship policy, it applied only to a minority of students. With regard to the second factor, the court held that the evidence submitted by the Commission was insufficient to show that the traditional liberal arts classes were “taught with the primary objective of religious indoctrination.” The court pointed to “affirmative evidence indicating that secular education is the primary goal of’ Columbia Union. The court examined the college’s mission statement and the descriptions of secular curricula in the college’s catalog, among other things, in making this finding. The court looked at the college’s syllabi for secular courses and determined that the religious references were too isolated and scattered to justify a finding that religion permeates the secular courses. And although the court found that the Seventh-day Adventist Church exerted a dominance over college affairs and that the college gave an express preference in hiring and admissions to members of the Church, these factors by themselves *433were not enough to make the college a pervasively sectarian one.
Id. at 508-09. In contrast to Columbia Union College, Lipscomb has a mandatory worship policy and imparts instruction with the primary objective of religious indoctrination. Lipscomb also places religious restrictions on admission and expressly hires faculty and staff based upon membership in the Churches of Christ.
Indeed, Lipscomb is even more pervasively sectarian than Regent University (“Regent”), the only other institution that has been found by a court to be a pervasively sectarian institution for Establishment Clause purposes. As noted by the Virginia Supreme Court in Lynn,
Regent’s Articles of Incorporation, provide that:
[Regent] shall exist for the purpose of bringing glory to God and His Son Jesus Christ by providing an institution or institutions of learning in which those who are mature in the knowledge of God and His ways can assist and guide, in a spirit of free inquiry and scholarly excellence, those who would learn of Him, His ways, and His creation, while together they study ways to glorify God and better their world.
538 S.E.2d at 685. Lynn also noted that Regent has adopted a Statement of Faith that provides,
Regent University is a Christ-centered institution. The Board of Trustees, along with the faculty and staff of the university, are committed to an evangelical interpretation and application of the Christian faith. The campus community is closely identified with the present-day renewal movement, which emphasizes the gifts, fruit and ministries of the Holy Spirit. It is expected that all trustees, officers, administrators and faculty will subscribe to this statement in writing[.]
Id. Regent’s Mission Statement provides:
Preamble — Regent University is a graduate institution that exists to bring glory to God the Father and His Son Jesus Christ through the work of the Holy Spirit.
Mission — Our mission is to provide an exemplary graduate education from biblical perspectives to aspiring servant leaders in pivotal professions and to be a leading center of Christian thought and action.
Vision — Our vision, through our graduates and other scholarly activities, is to provide Christian leadership in transforming society by affirming and teaching principles of truth, justice and love as described in the Holy Scriptures, embodied in the person of Jesus Christ, and enabled through the power of the Holy Spirit.
Id. In spite of its religious mission, Regent does not have any “specific religious requirement for student admissions, and the lack of such a ‘[Christian] commitment’ does not negatively impact an applicant’s standing for admission.” Id. at 686. However, the Virginia Supreme Court noted that “[a]ll applicants are required to submit a ‘Clergy Recommendation,’ both as a matter of policy and practice. Among the questions asked is whether the applicant has ‘made a meaningful personal commitment to Jesus Christ.’ ” Id. The Virginia Supreme Court in Lynn further remarked:
Although encouraged to do so, students are not required to attend Regent’s weekly corporate chapel services or participate in any particular religious activities. However, they must have “[p]ersonal goals consistent with the mission and goals of Regent University,” and must submit a “[p]ersonal goals *434statement” addressing how their “personal and spiritual objectives” relate to Regent’s “Christ-centered educational philosophy.” The instructions explain that “for the Christian, [a goal] is a statement of faith in God’s will for his or her life.”
Faculty, unlike students, are required to sign a document indicating their adherence to the “Statement of Faith.” They are “strongly encouraged but they’re not required” to attend chapel. The faculty is required to integrate “faith and learning.” Dr. Selig testified, and the SACS (Southern Association of Colleges and Schools) and the ABA (American Bar Association) agree, that the Statement of Faith has not interfered with academic freedom. Regent’s detailed academic freedom policy encourages faculty to “pursue truth ... by research, discussion, and other forms of inquiry.” Nonetheless, Regent prohibits faculty from using “their position or classroom as a platform to demand adherence by students to a personal theological viewpoint, political preference or social agenda.” The SACS in a review of Regent’s accreditation application in 1998 found that “[faculty and students are free to examine all pertinent data, question assumptions, be guided by the evidence of scholarly research, and teach and study the substance of a given discipline.” With respect to its curriculum, each faculty member at Regent is required to include in the syllabus for each class a “description of how the Christian faith and the Bible will be incorporated into the course.”
Id. at 617-18, 538 S.E.2d 682.
Like Regent, the “supreme purpose” of Lipscomb is to promote Christian ideals. Both Lipscomb and Regent also require applicants to submit a recommendation from a member of the clergy, without specifying the denomination. However, unlike Regent, nearly three-quarters of the students at Lipscomb are identified with a particular creed, the Churches of Christ. Further, in contrast to Regent, which encourages, but does not require, its students to attend chapel services or to participate in certain religious activities, daily Bible class and chapel attendance are mandatory at Lipscomb. In addition, while both schools require its faculty to adhere to religious principles and to incorporate the Bible into class instruction, Regent provides much greater latitude in terms of academic freedom than Lipscomb. Thus, even among pervasively sectarian religious institutions, Lipscomb clearly stands out as unrelentingly sectarian in its policies and practices.
The issuance of tax-exempt revenue bonds in this case constitutes direct aid within the meaning of the Establishment Clause
Given that Lipscomb is a pervasively sectarian educational institution, it thus must be determined whether the issuance of the tax-exempt revenue bonds is a direct or indirect benefit for Establishment Clause purposes. In this regard, it should be noted that because Hunt found that the Baptist College at Charleston was not a sectarian educational institution, it did not need to decide the issue whether the issuance of the revenue bonds constituted direct state aid in that case. In a footnote, though, the Court in Hunt remarked:
The ‘state aid’ involved in this case is of a very special sort. We have here no expenditure of public funds, either by grant or loan, no reimbursement by a State for expenditures made by a parochial school or college, and no extending or committing of a State’s credit. Rather, the only state aid consists, not of financial assistance directly or indi*435rectly which would implicate public funds or credit, but the creation of an instrumentality (the Authority) through which educational institutions may borrow funds on the basis of their own credit and the security of their own property upon more favorable interest terms than otherwise would be available. The Supreme Court of New Jersey characterized the assistance rendered an educational institution under an act generally similar to the South Carolina Act as merely being a ‘governmental service.’ Clayton v. Kervick, 56 N.J. 523, 530-531, 267 A.2d 503, 506-507 (1970). The South Carolina Supreme Court, in the opinion below, described the role of the State as that of a “mere conduit.” 258 S.C. at 107, 187 S.E.2d, at 650. Because we conclude that the 'primary effect of the assistance afforded here is neither to advance nor to inhibit religion under Lemon and Tilton, ive need not decide whether, as appellees argue, Brief for Appellees lk, the importance of the tax exemption in the South Carolina scheme brings the present case under Walz v. Tax Comm’n, 397 U.S. 664, 90 S.Ct. 1409, 25 L.Ed.2d 697 (1970), where this Court upheld a local property tax exemption which included religious institutions.
413 U.S. at 745 n. 7, 93 S.Ct. 2868 (emphasis added). Equally, in Johnson, this Court declined to resolve whether a very similar type of tax-exempt revenue bond issue amounts to a direct benefit because it held that the religious academy was not a pervasively sectarian educational institution. 241 F.3d at 511, n. 3. However, unlike those cases in which the institutions were found not to be pervasively sectarian, the issue must be directly confronted here because Lipscomb is an institution in which religion is so pervasive that a substantial portion of its functions is subsumed in the religious mission so as to suggest that the state aid to Lipscomb has the primary effect of advancing religion.
In deciding this question, it is advisable to make some preliminary observations. First, although the majority opinion correctly notes that this precise issue has not been addressed by other circuits or by the Supreme Court, it inaccurately states that all the state courts that have addressed the issue “have found that the issuance of industrial revenue bonds is not tantamount to the giving of direct aid to religious schools.” Opn. at n. 2. However, with the exception of the Virginia Supreme Court’s decision in Lynn, 538 S.E.2d at 682, none of the cases cited by the majority has addressed the precise question at hand, namely, whether tax-exempt bond financing to a pervasively sectarian educational institution constituted a form of direct state aid, having the primary effect of advancing religion, in violation of the Establishment Clause. Indeed, as noted by the California Supreme Court in Calif. Educ. Facilities Auth. v. Priest, 12 Cal.3d 593, 116 Cal.Rptr. 361, 526 P.2d 513, 518, n. 8 (Cal.1974), one of the cases cited by the majority:
Of course, if the Authority were to exercise its powers in aid of an institution which is pervasively sectarian within the meaning of the Hunt test, a different conclusion might be compelled.
“Individual projects can be properly evaluated if and when challenges arise with respect to particular recipients and some evidence is then presented to show that the institution does in fact possess these (disqualifying) characteristics.” (Tilton v. Richardson (1971) supra, 403 U.S. 672, 682, 91 S.Ct. 2091, 29 L.Ed.2d 790.) We emphasize, however, that the fact an institution of higher education is affiliated with or governed by a religious organization is insufficient, without more, to establish that aid to that insti*436tution impermissibly advances religion. (See Hunt v. McNair (1973) supra, 413 U.S. 734, 743, 93 S.Ct. 2868, 37 L.Ed.2d 923; Tilton v. Richardson (1971) supra, 403 U.S. 672, 686-687, 91 S.Ct. 2091, 29 L.Ed.2d 790.)
Priest, 116 Cal.Rptr. 361, 526 P.2d at 518, n. 8 (parallel citations omitted.)
Further, contrary to the suggestion in the majority opinion, it is of no moment that “[t]he Board has arranged tax-exempt financing, for example, for a number of colleges and universities with and without a religious affiliation, as well as for low-income housing projects, the Country Music Hall of Fame, the Easter Seal Society, retirement centers, the Jewish Community Center, the Young Mens Christian Association, Nashville Public Radio.” As recognized by the Supreme Court, there is a distinction between a “pervasively sectarian” institution and a “religiously affiliated” one. See Johnson, 241 F.3d at 510 (“A pervasively sectarian institution is one whose religious functions cannot be separated from its non-religious functions; an institution is not pervasively sectarian merely because it is religiously affiliated.”) (citing Hunt, 413 U.S. at 743, 93 S.Ct. 2868); Columbia Union I, 159 F.3d at 158 (citing Roemer, 426 U.S. at 750, 96 S.Ct. 2337.) Further, it is of no legal significance that “no claim is made that the Board ever favored or disfavored one religion over another.” See Zelman, 122 S.Ct. at 2505 (Breyer, J. dissenting opinion) (noting “the development of constitutional doctrine that reads the Establishment Clause as avoiding religious strife, not by providing every religion with an equal opportunity (say, to secure state funding or to pray in public schools), but by drawing fairly clear lines of separation between church and state”) (emphasis in original). What matters in this case, then, is only whether the state aid provided to Lipscomb, a pervasively sectarian institution, is in violation of the Establishment Clause.
The district court properly concluded that the Establishment Clause was violated because Lipscomb received a direct economic benefit from the government, which resulted in excessive entanglement of the government with the religious institution. Although the district court noted that “[t]here is no single, clear definition of ‘direct benefit’ to control this analysis,” Black’s Law Dictionary defines “direct” in the relevant sense as “[immediate; proximate; by the shortest course; without circularity; operating by an immediate connection or relation, instead of operating through a medium; the opposite of indirect.” Black’s Law Dictionary 459 (6th ed.1990). In contrast, “indirect” is defined as “[n]ot direct in relation or connection; not having an immediate bearing or application; not related in the natural way.” Id. at 773.
As the district court correctly noted, the Board and Metro were both directly connected to the project benefiting Lipscomb. According to the official statement regarding the issuance of $15 million in educational facilities refunding bonds,
The Issuer [the Board] was created on May 6, 1959 pursuant to the Act as a public corporation and instrumentality of the Metropolitan Government of Nashville and Davidson County, Tennessee, for the purpose, among other things, of financing educational facilities with a view to promoting the education of the people of the State of Tennessee. The Issuer is authorized by the Act to issue revenue bonds, including refunding bonds, payable solely from the revenues and receipts from any such facilities and secured by a pledge of said revenues and receipts.
(J.A. at 130-31.) Thus, contrary to the protestations of the Board and Metro, it is *437clear that because the Board is an instrumentality of Metro, both Defendants were involved in the project benefiting Lipscomb, notwithstanding their separate legal identity. Further, the district court properly rejected Metro’s contention that it could not be liable for an Establishment Clause violation in this case because it only provided “host approval” for the bonds to be federally tax exempt. As the district court properly noted, Metro’s role in the financing was critical because the bonds could not have been issued as federally tax exempt without Metro’s participation in approving the bond issue.
Under the terms of the statute, local governments are authorized to offer low-interest loans by making funds available through the issuance of tax-exempt municipal bonds. Here, Lipscomb approached the Board seeking a low-interest development loan funded by the proceeds of the tax-exempt bond issuance. While the money that went to Lipscomb ultimately came from private investors who purchased the tax-exempt revenue bonds, and while Lipscomb must repay Sovran Bank for the loan, the direct economic benefit that Lipscomb received from the governmental entities, as the district court pointed out, was the low-interest “loan from the Board and, hence, from Metro.” Steele, 117 F.Supp.2d at 717.
Thus, even though there was no direct transfer of money from the Board to Lipscomb, the district court correctly found that “[t]he money went directly to Lipscomb in the form of a loan from the Board, an instrumentality of Metro.” Id., 117 F.Supp.2d at 720. As a result of the low-interest loan of $15 million originated by the Board at Lipscomb’s request, Lipscomb thus saved about 30% of the cost of its campus building projects. These savings enabled Lipscomb to fund the new library, intramural sports building and field, parking lots, landscaping, computer mainframe, baseball stadium, tennis courts, fiber optic network, a pedestrian walkway, and renovate its administration and business school buildings. Through the low-interest loan, Lipscomb was thereby able to improve its facilities to increase its student enrollment to 3,000, and thus advance its sectarian mission.
The district court also properly rejected Defendants’ argument that Lipscomb’s economic benefit came from the bond purchasers who purchased the tax-exempt revenue bonds, and not from the government. Properly understood, Lipscomb received a direct economic benefit in the form of a low-interest government sponsored loan. For Establishment Clause purposes, it is immaterial that the Board subsequently assigned the loan to Sovran Bank.
The district court also correctly rejected Defendants’ argument that the bondholders, not Lipscomb, are the true beneficiaries of the aid program. As the district court properly noted, the Supreme Court in Hunt examined a similar transaction and found that “[t]he income tax-exempt status of the interest enables the Authority, as an instrumentality of the State, to market the bonds at a significantly lower rate of interest than the educational institution would be forced to pay if it borrowed the money by conventional private financing.” Steele, 117 F.Supp.2d at 717 (quoting Hunt, 413 U.S. at 739, 93 S.Ct. 2868). Thus, the district court rightly concluded that “Lipscomb received a flow of funds into its coffers provided by a loan from the Board. These funds did not merely supplement the teaching of secular subjects at Lipscomb; they were central to the school’s stated goal of increasing enrollment. If Lipscomb’s mission is to promote Churches of Christ doctrine, then Metro, through the Board, provided aid to *438promote Churches of Christ doctrine.” Steele, 117 F.Supp.2d at 718.
It should be pointed out, at this juncture, that characterizing the role of the state as a “mere conduit” on the basis that the use of governmental funds is not involved ignores the fundamental character of the government’s participation in this kind of financing arrangement. In this respect, it is important to examine the reasoning of the Virginia Supreme Court in Lynn, which found that the governmental aid involved in the revenue-bond financing in that case did not amount to “direct aid” to Regent University, a pervasively sectarian educational institution, because no governmental aid was received by the University since the bond proceeds are funds of private investors. 538 S.E.2d at 638. According to Lynn, “Regent receives these funds because of the genuinely independent choices of investors,” whose decisions to purchase the bonds “cannot be attributed to state decision making.” Id. at 639, 538 S.E.2d 682 (citing Zobrest v. Catalina Foothills Sch. Dist., 509 U.S. 1, 10, 113 S.Ct. 2462, 125 L.Ed.2d 1 (1993)). Accordingly, the Virginia Supreme Court concluded that there was no Establishment Clause violation because “[n]o government funds ever reach Regent’s coffers.” Id.
What is being ignored in this account is the fact that the government provides the pervasively sectarian educational institution with a direct economic benefit in the form of a low-interest loan, which the institution would not be able to obtain without the direct participation of the government. Thus, although it is true that no state funds are being transferred through this kind of financing mechanism, the relevant question is whether the government has provided the pervasively sectarian educational institution with a direct economic benefit. Contrary to the understanding of the court in Lynn, a direct economic benefit is not necessarily determined by merely looking at whether there was a transference of governmental money. To constitute a direct economic benefit to a pervasively sectarian educational institution, it is sufficient that the government makes it possible for the institution to obtain economic aid that it would not otherwise be able to obtain without the government’s direct participation. That no governmental funds actually reach the coffers of the pervasively sectarian educational institution does not alter for one moment the fact that a direct economic benefit accrues to such an institution as a result of the government’s active participation in arranging for a low-cost loan that enables the institution to advance its sectarian mission.
In view of the government’s direct involvement with advancing the religious mission of a pervasively sectarian educational institution, it cannot be said that this form of state aid comes within Walz v. Tax Comm’n, 397 U.S. 664, 90 S.Ct. 1409, 25 L.Ed.2d 697 (1970), where the Supreme Court upheld a property tax exemption to religious organizations for properties used solely for religious worship. See Hunt, 413 U.S. at 745 n. 7, 93 S.Ct. 2868. As noted in the concurring opinion of Justice Brennan in Walz, while general subsidies of religious activities would constitute impermissible state involvement with religion, tax exemptions “constitute mere passive state involvement with religion and not the affirmative involvement characteristic of outright government subsidy.” Walz, 397 U.S. at 690-91, 90 S.Ct. 1409. As explained by Justice Brennan:
Tax exemptions and general subsidies, however, are qualitatively different. Though both provide economic assistance, they do so in fundamentally different ways. A subsidy involves the direct transfer of public monies to the subsidized enterprise and uses resources *439exacted from the taxpayers as a whole. An exemption, on the other hand, involves no such transfer. It assists the exempted enterprise only passively, by relieving a privately funded venture of the burden of paying taxes.
Id. (footnotes omitted.) Thus, in finding that the property exemptions in question did not rise to the level of excessive governmental involvement, Justice Brennan noted:
To the extent that the exemptions further secular ends, they do not advance “essentially religious purposes.” To the extent that purely religious activities are benefited by the exemptions, the benefit is passive. Government does not affirmatively foster these activities by exempting religious organizations from taxes, as it would were it to subsidize them. The exemption simply leaves untouched that which adherents of the organization bring into being and maintain.
Id. at 693, 90 S.Ct. 1409.
Although no state funds were transferred through the revenue-bond financing employed in this case, the form of state aid at issue, however, exhibits the “affirmative involvement characteristic of outright governmental subsidy.” Id. at 691, 90 S.Ct. 1409. Here, the Board and Metro do not play a “passive” role, but rather “affirmatively foster” the activities of Lipscomb by acceding to its request for a low-interest loan funded by tax-exempt revenue bonds. Moreover, the tax-exempt revenue financing does not “simply leave[ ] untouched that which adherents of the organization bring into being and maintain.” Id. Instead, the issuance of the low-interest loan to the pervasively sectarian educational institution in this case “employs the organs of government for essentially religious purposes” by allowing Lipscomb to fund improvements to its University in order to advance its sectarian mission. Id. By providing a low-interest loan funded by tax-exempt revenue bonds to a pervasively sectarian educational institution, the Board and Metro provided the kind of state aid that is characteristic of a direct governmental subsidy.
Consequently, given Lipscomb’s pervasively sectarian character, it must be concluded that Lipscomb’s receipt of a direct economic benefit in the form of a low-interest $15 million loan resulted in excessive governmental entanglement with the religious mission of the University. In view of Lipscomb’s “character and purposes,” Agostini, 521 U.S. at 232, 117 S.Ct. 1997 (quoting Lemon, 403 U.S. at 615, 91 S.Ct. 2105), its “secular activities cannot be separated from sectarian ones.” Roemer, 426 U.S. at 755, 96 S.Ct. 2337. Because the religious and secular functions are inseparable at Lipscomb, “no safeguard can ensure that direct monetary aid, even if designated to fund the school’s secular functions, will not aid its religious mission.” Columbia College I, 159 F.3d at 158 (citing Roemer, 426 U.S. at 758 n. 21, 96 S.Ct. 2337.) So even though the loan agreement explicitly prohibits Lipscomb from using any bond-financed facilities for religious purposes, there is no way to prevent that from happening here because of the University’s pervasively religious character. Since the sectarian and secular activities at Lipscomb are so inextricably intertwined, the government cannot avoid excessive entanglement with the sectarian mission of the University. Agostini, 521 U.S. at 234, 117 S.Ct. 1997. Accordingly, the low-interest loan arranged by the Board through the issuance of the tax-exempt revenue bonds to Lipscomb results in a violation of the Establishment Clause. Indeed, it is not at all clear that Lipscomb would have been able to proceed with its construction and renovation project with*440out the issuance of the tax-exempt revenue bonds; certainly, the record indicates that it would not have been possible to proceed on such financially favorable terms.
The Supreme Court’s recent decision in Zelman, 122 S.Ct. at 2460, does not alter this conclusion, but indeed supports it. As noted by the Court in Zelman, “our decisions have drawn a consistent distinction between government programs that provide aid directly to religious schools ... and programs of true private choice, in which government aid reaches religious schools only as a result of the genuine and independent choices of private individuals.” Id. at 2465 (citations omitted.).5 The Court added:
Mueller [v. Allen, 463 U.S. 388, 103 S.Ct. 3062, 77 L.Ed.2d 721 (1983) ], Witters [v. Washington Dept. of Servs. for Blind, 474 U.S. 481, 106 S.Ct. 748, 88 L.Ed.2d 846 (1986) ], and Zobrest [v. Catalina Foothills School Dist., 509 U.S. 1, 113 S.Ct. 2462, 125 L.Ed.2d 1 (1993)] thus make clear that where a government aid program is neutral with respect to religion, and provides assistance directly to a broad class of citizens who, in turn, direct government aid to religious schools wholly as a result of their own genuine and independent private choice, the program is not readily subject to challenge under the Establishment Clause. A program that shares these features permits government aid to reach religious institutions only by way of the deliberate choices of numerous individual recipients. The incidental advancement of a religious mission, or the perceived endorsement of a religious message, is reasonably attributable to the individual recipient, not to the government, whose role ends with the disbursement of benefits.
Id. at 2467.
The situation is quite different, though, when the government aid program provides a direct economic benefit to a pervasively religious educational institution and thereby advances its religious objectives. For unlike state aid to individual recipients who choose to advance the religious mission of an educational institution, the government’s role does not end with the disbursement of benefits when economic aid is made directly to a pervasively religious educational institution, such as Lipscomb. In the case of a pervasively sectarian educational institution, such direct economic aid by the state is, by definition, inextricably intertwined with the religious mission of the school so as to establish that the government is endorsing the sectarian character of the institution in violation of the Establishment Clause of the United States Constitution. To permit such state aid to a pervasively sectarian educational institution does not merely “remove a brick from the wall that was designed to separate religion and government,” Zelman, 122 S.Ct. at 2485 (Stevens, J. dissenting opinion); it leaves a gaping hole in the wall separating church and state.
CONCLUSION
Based upon the foregoing, I would AFFIRM the district court’s order granting Plaintiffs’ motion for summary judgment, denying Defendants’ motions for summary judgment, and entering a permanent injunction prohibiting the Board and Metro from issuing additional tax-exempt bonds *441to Lipscomb or tax-exempt bonds to any pervasively sectarian institution.
. This portrayal of Lipscomb is largely based upon its own publications that date from the time that the Board approved Lipscomb's request for a loan financed by the issuance of $15 million in tax-exempt bonds. It should be noted that for the purposes of deciding the issue on appeal, there is nothing in the record to suggest that the current publications of Lipscomb are materially different in any relevant respect.
. The AAUP's principles provide:
a. Teachers are entitled to full freedom in research and in the publication of the results, subject to the adequate performance of their other academic duties; but research for pecuniary return should be based upon an understanding with the authorities of the institution.
b. Teachers are entitled to freedom in the classroom in discussing their subject, but they should be careful not to introduce into their teaching controversial matter which has no relation to their subject. Limitations of academic freedom because of religious or other aims of the institution should be clearly stated in writing at the time of the appointment.
c.College and university teachers are citizens, members of a learned profession, and officers of an educational institution. When they speak or write as citizens, they should be free from institutional censorship or discipline, but their special position in the community imposes special obligations. As scholars and educational officers, they should remember that the public may judge their profession and their institution by their utterances. Hence they should at all times be accurate, should exercise appropriate restraint, should show respect for the opinions of others, and should make every effort to indicate that they are not speaking for the institution.
(J.A. at 689.)
. The Board is a public corporation created under the authority of Tenn.Code Ann. § 7-53-101— § 7-53-311. Metro approved the creation of the Board by resolution as provided in Tenn.Code Ann. § 7-53-201. By law, all amendments to the corporate charter of the Board must also be approved by Metro. Tenn.Code Ann. § 7-53-204 (1985). Under the statute, the Board has the authority to enter into loan agreements with third parties; it can sue and be sued; it can sell any of its properties; it can issue bonds and borrow money from banks and other financial institutions by issuing notes. Tenn.Code Ann. § 7-53-204. In addition, the Board has the authority to issue tax-exempt revenue bonds for various public work projects, including
[a]ny nonprofit educational institution in any manner related to or in furtherance of the educational purposes of the institution, including, but not limited to classroom, laboratory, housing, administrative, physical education and medical research and treatment facilities.
TenmCode Ann. § 7-53-101(ll)(A)(vii)(1990 Supp.). After the approval and sale of the tax-exempt bonds under the statute, the municipal governments that approve them are not liable for repayment of the debt. Tenn. Code Ann. § 7-53-306 (1985).
. The lead Plaintiff, Harold E. Steele, is no longer a party as a result of his death on April 1, 1998.
. The majority opinion runs this distinction together, citing in footnote three cases involving government aid provided directly to religious schools with those involving government aid that reaches religious schools through individuals.