I think you could still compromise on 2. by requiring legacy or other discriminatory admissions practices to be a small percentage of the students they give full ride merit scholarships on, or similar.

This is particularly so because the advantage of this kind of school is networking, and it's in the interest of the disadvantaged to give them opportunity to network with the advantaged.

But it's also no big deal if we don't make that compromise.

Public money is precious, and we should think really hard about taking money from the general public just to give it to wealthy institutions any time we do it.

I like this idea, like there could be tiers of grant eligibility instead of all or nothing.