(2) The State Board shall issue a certificate of approval to a noncollegiate educational institution if it finds that the facilities, conditions of entrance and scholarship, and educational qualifications and standards are adequate and appropriate for:
(i) The purposes of the institution;
(ii) The programs, training, and courses to be taught by the institution; and
(iii) The certificates and diplomas to be issued by it.
(3) The State Board may not issue a certificate of approval to an institution that practices discrimination based on race, color, or national origin.
(4) This subsection does not apply to an institution operated by a bona fide church organization, including the Amish and Mennonite church parochial schools. However, an institution that does not have a certificate of approval from the State Board may not receive State funds, except that an institution operated by a bona fide church organization is not required to have a certificate to receive State funds for eligible students in the food service program who are enrolled in nursery school through the eighth grade.