NCAA, Division II, and Financial Aid

A friend of mine is working on a project and would be interested in any thoughts or suggestions on this question:

Can a Division II college exempt student athletes from its general financial aid program? That is, if a student athlete is awarded an athletic scholarship, can the college then take them out of the general pool for need-based financial aid? Result would likely be that the athletes receive their athletic scholarship but not the entire academic amount, even though under a need-based analysis, they would potentially qualify for funding of the entire academic amount. Any potential discrimination issues with this? Any potential Title IX issues with this? Any NCAA regulations/rules that deal with this?

I don't think the NCAA would be concerned with this exemption, but sometimes the NCAA takes positions that seem counter-intuitive. Any thoughts?