This opens ever so many delightful cans o' worm. First, I'll go ahead and say that they are offering a "religious education," to the extent that such a thing exists, except ... for where they are not. And ultimately, they would deny (or at least most such schools would deny) that their religious affiliation in any way impedes the caliber of their schooling, or even affects the content of it. In some cases, I'm sure that's true, though in most, I wouldn't agree.
The problem is that what would be necessary here would be to clearly prove some very fuzzy points. I think we'd have to stray all the way into the realms of metaphysics and epistemology in order to close the books on this one. (Which is to say, we never would). For example, what constitutes "religious education?" Harvard was, after all, a baptist school, originally. Almost all the venerable American Universities of note are (nominally) religiously affiliated as well. I think that U of M and U of Chicago are noteworthy exceptions, among others. Notre Dame arguably still has deep religious affiliations (and some of the attendant consequences, intended or otherwise), and Liberty isn't by any means occupying the far end of the spectrum.
What percentage of courses offered, or curricula, need be religious in nature in order to classify a school as "offering a religious education?" And, clearly, we're not talking about whether the subject is religious, as any number of sociological or anthropological courses would fall into the category if so. And if we're discussing which didactic methods are acceptable, then musn't we pursue this inquiry across the spectrum to address politics of movement and systems of knowledge? Perhaps, if we're only discussing funding, not.
Ultimately, I guess I don't care about the question where the matter of University is concerned (although it is very interesting politically, ideologically). Anything which restricts the latitude of its searches, whether dogma or funding strictures, is antithetical to the nature of the thing. But then again, as I've said before, the true form of the University is only incidentally and accidentally associated with the structure of the university as found in the world.