Couldn't find what you quoted (other than mine) so I pasted in.
The statement isn't entirely false though. Depends on what was intended.
It wouldn't allow being able to use more money on scholarships elsewhere assuming the school uses all 9.9. However, it's not funny money and might allow the athletic department to use it somewhere else. Lehigh has a large percentage of scholarships (at one point 9 of 9.9) endowed with the normal school funding dealing with the rest. We don't have instate/out of state issues being private but, for example, a few years ago two of our kids had non-wrestling physical issues that caused them to have to quit the sport. The school continued to honor the scholarships from the endowed fund. So we didn't go 9.9 for a couple years as a result. Another school might use other money to do this. They might fund the former scholarships from non-athletic funding. But again, if you're saying they could pay more in scholarships because one kid is instate, you were correct. If they had a scenario where a scholarship was $1 in a particular instance, they might only be able to have to spend $9.90 total. It might free up money for something else but not for scholarships.