In our case, the “free tuition” schools really didn’t match up to the school where he got merit money. Yes, it would have been nice to not have to pay for college, but the educational value just wasn’t there. OTOH, he also did not get to go to the full pay school he preferred to his merit option as there was very little added educational value for the increased cost.
The bottom line is how much you are able/willing to pay. Add to that the federal loans, and she has her budget. No harm in applying to a few “dream” schools as long as she knows ahead of time that budget constraints. Or run the Net Price Calculator for Stanford to see if you will get enough financial aid. At 18 (or almost 18) kids are old enough to understand financial limits.