Though the individual states may manage the colleges, the education funding is federal which is why the federal government is allowed to set admission and education standards for public schools and state colleges. The states may add on additional requirements as long as they don't conflict with the federal requirements. If you want the money, you have to follow the federal rules. So, though you're technically right, in practice, you're wrong. As the old sayings go: "Follow the money" and "he, who has the gold, makes the rules."