A long time ago, the only way to get songs without paying for them was to shoplift a physical vinyl record from the store yourself. There was no MP3 file or Limewire or Kazaa or BearShare! Shoplifting was and still is a crime which many times involves the police and sometimes court and fines and/or jail.
If you had a record and your friend wanted to listen, you had to loan the record to your friend who could play it on his record player but you couldn't play it at the same time on your record player.
Now, however, there is this digital copy of each and every song and many of them are just sitting out there on the web just asking to be copied. People would rather get something free than pay for it so these songs are being copied all over the world. Just like the vinyl record, it is against the law to copy most of these songs. The record/music industry is protecting its investment in each of these songs by prosecuting Internet service providers (ISP) who allow it. If a school/ cable company/ISP allows its users to copy these songs without consequences, it will be held liable. A school/institution could lose a very large sum of money, lose its ability to provide Internet access, and lose its federal funding. If that happens, it could effectively shut the doors of that institution or company.
By sanctioning the users who illegally download copyrighted music, many institutions are saving the users from being punished by the recording industry itself. Just like the vinyl records, users could face police questioning, court, fines, and/or jail. Whatever sanction the institution levies is most likely much less than the court or fines or jail.