Colleges that bar or restrict military recruiting on campuses cannot be penalized with the loss of federal funds, a panel of the Federal Appeals Court ruled last week in Philadelphia. In a 2-1 decision, the court held that educational institutions have a First Amendment right to exclude recruiters from the armed services whose hiring policies discriminate against gay men and lesbians. In a dissenting opinion, one judge argued, among other things, that national security interests outweighed free speech considerations in the case.