I think the school got caught flat-footed on this. It's my understanding that Switzerland had been postponing acceptance of Schengen status, and they managed to miss this acceptance.
The school DID adjust the curriculum by shifting part of the term to a non-Schengen country. But I arrived in Europe a couple of weeks early, so even with the change, I'm over the limit. Also, it was my intention to return to Switzerland after the term (that's where my return flight departs) and had hoped to do some traveling and look for an internship.
I would like to mention that my family and I are pretty well traveled and usually do extensive research. Besides expecting the school to catch any major potholes, I would suggest that the Switzerland/Schengen information is woefully lacking. For example, on the European Union's official website it still states "The full Schengen members are Austria, Belgium, the Czech Republic, Denmark, Estonia,Finland, France, Germany, Greece, Hungary, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden (but not Ireland and the United Kingdom) plus Iceland and Norway (which are not EU members)." (http://europa.eu/abc/travel/doc/index_en.htm).