Male, female or neither? Gender identity debated at same-sex colleges

I was looking for a new story to read during my radio show this morning and I found this, in my mind, amazing story on CNN: Male, Female or Neither? Gender Identity Debated at Same-Sex Colleges
The article is looking at the idea of same sex schools and what happens when attending students do not fit the traditional gender role. I personally am not sure what I think about this. I am all for people being whatever they choose to be, I do not think gender should define a person. At the same time we do live in a gendered world, and some people feel more comfortable in a same sex school and environment. Even at Elmira College I've been in class where male students will take over the class. In my ideal world this would never be an issue because gender would not define people the way it does now, it would be much more androgynous. This is not the society we are living in, so what should be do now?
In the position what I would do is allow students to continue their time at the school and allow them to be whatever person and gender they feel comfortable in.