Keeping that student is perceived a liability for them. As they honestly put it they don't really think they will be safer at home, and it is obvious they don't care what happens. They just don't want to deal with it. They see this person as a risk not worth taking.
> If I were a liar, I would never have gotten myself into this mess. Fuck me for not being a liar.
You sometimes have to be a liar when dealing with large bureaucratic systems. A large school is certainly one such thing. They do not have your best interests in mind. Healing you is not on their priority list. Be honest with people you trust and love. Don't treat institutions as moral agents.
You'll even find sometimes your doctor's #1 priority might not be to heal you. Their goal could be to perform more surgeries. So all of the sudden you are told to get surgeries. Get second opinions. And so on.