As so often happens, I am of two minds about this. The children of a lesbian couple have been, not expelled exactly, but denied re-enrollment.
Clearly the Church like any other provider of a service has the right to refuse service. Legally.
Do they have that right, as we would say, morally? Is the education and we assume the religious safeguarding of a child's soul to be thrown away because the Church finds the child's home setting distasteful?
I suppose there's a difference between the Church, monolithic guardian of Catholic souls and the Church, provider of excellent educational opportunities. But - and this is a question to which I don't know the answer - if the Church's school business gets a tax break, do they have the right to discriminate?