I’ll avoid the state wide economic policy questions and answer on what’s best for the university. If the state ever wants to have at least one university, which competes with UCB, UCLA, and UMich caliber state colleges, they have to focus on group A. Group A is the group most likely to be large donors in the future, which grows the endowment, allowing them to add more merit scholarships in the future, and have the cycle repeat. If a state wants to increase its undergrad prestige at its flagship, it first has to stop the “brain drain” of its best and brightest to other states for college. This adds to the prestige of the college, encouraging even more of their best and brightest to stay in the future in a virtuous cycle.