I hope this is much ado about nothing. From what I can gather from the www and from its own website, OSNAS looks like a fine Christian school and its academic rigor and graduation expectations are all clearly set out, which more than meet the standards for NY state. The SJU admissions office obviously knows the quality of local schools. The NCAA clearinghouse has its minimum standards, all of which would be met for a student who graduates from OSNAS. Why OSNAS is allegedly on a "watch list" is beyond me.
These student-athletes have, to my knowledge (from what I have gathered here) already started their educations at SJU in the summer session. They have been admitted as SJU students, separate from basketball. I suppose in a worst case scenerio, if the NCAA watchdog folks don't think OSNAS is legit (which could result in a potential lawsuit, since this is a real school with real supporters and not some diploma mill in a basement), it would mean some court eligibility issues and that the student-athletes need to take out student loans. That would suck.