Yale is not the first university to do so, but it is the largest and most prestigious.
Rep. Mark Souder, R-Ind., proposed the legislation that has caused controversy in academic circles across the nation. The legislation states that students who have drug convictions cannot receive federal grants and loans.
But Souder has said that the intent of the legislation he proposed is not being enforced properly. Seth Becker, Souder's press secretary, said the law was not intended to target students who have been convicted and punished in the past, but those with current offenses.
Becker said Souder is attempting to amend the legislation so that it is enforced as he intended.
The proposed change has not yet been debated on the floor of the U.S. House of Representatives.
A Yale spokeswoman said the university would not make additional comments on the issue.
Becker said the actions of Yale's administration are in accordance with what the representative has been fighting for the last couple of years.
"If (Yale is) giving money to applicants who have been denied aid because of previous drug conviction, well, we're fighting that battle ourselves," Becker said.
"Our original conclusion in writing this provision was that federal money not be used to fund students who (currently) abuse drugs," he said.