It's appears they illegally recorded the
conversation without Amanda Sheppler's
consent which is somewhat illegal and then shared it with the police. The conversation was somewhat questionable but the police probably didn't tell her rights when the police questioned her. I find it interesting that a group of students reported what they overheard.
What's really scary about this is that the university used other students to investigate other students. They also depended on other students reports (spies who might have had questionable motives) to monitor and investigate another student.
This is like Stalinist Russia where what everyone said was monitored by a network of spies.