I wonder if he doesn't have access to other forms of financial aid as long as he is not an active player. I believe that back in Mac's time there was a football player from Ames (Kohler?). He was getting other forms of aid while he was a walk-on squad member. Later in his career, he had to choose between seeing the field as a special teams player vs giving up his financial aid. I'm not sure if the policies are still the same or if they also apply to basketball.
Can't be officially recruited. Bubu wasn't officially recruited so he could receive academic aid I believe. I would guess most walkons fall under that umbrella.