According to The Hollywood Reporter, the production was expelled from Emory University's campus when it was decided that the raunchy nature of the film was not something Emory wanted to be associated with.
Once the production was kicked off Emory's campus, "Nerds" moved to neighboring school Agnes Scott College in Decatur, Ga., but the smaller college lacked the large-scale campus feel that the movie's producers felt it called for. Once production was halted, it became a challenge for the studio to find another location acceptable for shooting, while continuing to pay an entire production crew for their time.
In 1984, filming of the original film encountered the same situation as the University of Arizona, originally agreed to let the filmmakers shoot there, but then balked when they read the script. The producers were able to convince U of A that the movie would not make fun of the school directly and production continued. I guess they weren't as lucky with Baylor.
Pity, as I would have enjoyed seeing how they were going to modernize the nerds for this time period. Best not to mess with a classic, anyway.