Somewhere in the dead of night last Tuesday, four students fastened a fish hook to a cardboard effigy of Sen. Barack Obama and hung the line from a tree on the campus of George Fox University, a small private Christian school nestled in the rural community of Newberg, Ore. (population 21,000). Around the neck of the cardboard cutout of Obama was a note reading, "Act Six reject," a reference to an affirmative-action-style program on campus that seeks out students from urban areas who often happen to have minority ethnic backgrounds. Discovered by custodians and at least two students, the distasteful display came down before it could be exposed to the entire 1,700-population student body—but not before the ugly incident made the national news.

The perpetrators, whose names and motives weren't released to the media, face long-term suspension and community service for penance, according to the university, which announced their confession late Tuesday. The U.S. Secret Service and the Federal Bureau of Investigation are investigating whether a hate crime or a threat has occurred (local cops quickly concluded no state laws were violated). And the campus is in the midst of a swirling debate about the meaning of the episode. Was it a political statement? A suggestion that Obama somehow was unfairly advantaged by affirmative action? Or was Obama's image simply the clearest way to communicate the frustration some white students feel about programs such as Act Six?

"How can you not think of race, when you see an image like that hanging from a tree?" said Melanie Hulbert, an assistant professor of sociology at the school, who didn't actually see it. "We've all spent some time trying to hypothesize what this individual was thinking."

The lynching imagery was especially disturbing to minority students. "We have a hard time understanding the meaning behind it," says Vanessa Wilkins, a 19-year-old sophomore at George Fox who is in the Act Six program. "Obviously it was against Sen. Obama, and it brought back a lot of horrible racial connotations with the fact that he was hanging from his neck in a tree." Wilkins is of Guatemalan and Mexican descent.

Campus administrators, who announced Tuesday that the students involved had confessed but didn't reveal the culprits' explanations, insist that this is an isolated case that doesn't reflect on the belief systems of those who walk George Fox's hallways. The school's traditions are based on the Quaker faith, and the Quakers famously participated in the Underground Railroad, helping slaves to freedom. In a campus-wide speech on Thursday, the school's president made clear that the incident was not Christian. "We absolutely cannot hate those around us and say that we love God," Robin Baker said. "It is not possible."

Early on, some bloggers suspected a setup by a liberal student who wanted to make the school look bad. Others say it could be nothing more than a dumb prank by someone who was unaware of all the racial undertones of the act. The mystery motive leaves the campus with no clear answer about whether this is indicative more of blatant racism or ignorance about the power of symbols. Whatever the agenda, the case could be an opportunity for a new discussion about race at George Fox, where minority enrollment jumped from 16 to 25 percent between 2006 and 2007.

"There are a lot of students who don't understand the extent to which racism still exists today," says professor Hulbert. "They haven't grown up during the time of the civil rights movement, Rodney King. They don't even remember O.J. Simpson."

That reality may lend some credence to the "stupid kid" theory. "I think it was some stupid kids not realizing the ramifications of what they've done," says Melanie Springer Mock, who teaches literature and journalism at the school. "They're not even considering that what they did might be considered a racist message."

The "Act Six reject" sign demonstrates that whoever hung the effigy doesn't get how the program works. The national program has cohorts on seven different campuses, including George Fox, which adopted Act Six without controversy last fall after a nine-month training session. The only prerequisite for the full-ride scholarship is that participants come from the nearby Portland area. Beyond that, says Act Six student Jesus Garcia, the scholarship committee looks for community service, leadership and grades. The program is more focused on socioeconomic diversity than racial diversity, say teachers and students, though only two of the 17 recipients currently attending school at George Fox are white.

Most people understand the point of Act Six, says Wilkins. She got into the program in part because she comes from a family of eight children, all adopted. "Some people are really excited for me. Some don't understand why I got it. One of my favorite comments was, 'I wish I was a black kid, so I could get a scholarship like that too.'"

That's a phenomenon called "the limited good," explains Ron Stansell, a professor of religion at the school, and it may have more to do with the effigy hanging than outright racism. The concept, in anthropology, refers to the perception that wealth is a finite entity, such that one person's gain is at another person's expense; that economic life is a zero-sum game.

"I think that's what I'm seeing here," Stansell says. Students might think to themselves, "Here are minority students that have gotten a benefit I have not gotten. It must mean, in the cosmic scope of things, that I've been cheated."

Indeed, many of the comments posted in response to stories written by the Portland Oregonian newspaper took aim at affirmative action. "Can I qualify for the 'Act Six' scholarship?" wrote one commenter. "White, Christian, middle-class, good high school grades?"

And another, scoffing at President Baker's accolades for a more diverse campus, wrote, "How or why is this in and of itself to be considered any kind of 'achievement'? Lowering standards to make your school appear more 'tolerant' or politically correct is hardly an achievement. Affirmative action is a negative—helps no one, and only dumbs down the mission."

At the other end of the extreme are comments that blame "intolerance" at George Fox for the incident, pointing out the lifestyle pledge that students and teachers are required to sign, upon attending school here. The pledge decrees that sexual behaviors outside the context of "mutual compassion, love and fidelity"—such as homosexuality—are inconsistent with God's teaching.

"You make a choice to come here," said Wilkins, defending the pledge. "We've had students who are homosexual on campus before. They are what they are, and we love and accept them regardless. But I'm sure it appears we're intolerant."

Be it racism, the limited good, anti-gay policies or just a dumb prank, there's plenty of material for spirited discussion these days at George Fox University—which is, in no small way, what higher education is all about.