I would take R1 out - at the undergrad level. I’m not sure it’s “that important”. Others may think I’m wrong.
I don’t think SLO is R1/2. Schools like Wake Forest, TCU, UAH, Miami Ohio and more aren’t R1.
I would find the right school - there are brilliant PhDs everywhere doing research. Will the grant money be there - maybe, maybe not - but I don’t think someone will be held down if they don’t go to R1 - I mean, look at the PhD feeder list is loaded with LACs.
At the same time, R1 schools like U of Kansas, where my uncle was a professor, are loaded with leading research opportunities at a dirt cheap price.
I still have a hard time suggesting somebody leave a full ride at a fantastic school - and I don’t care if it’s R1 or not - you are talking $17 or $18K.
Others with high merit assured will be low 20s-30s.
Even UCs will be 40-ish.
The OP will be taking personal financial risks that they may not be able to recover from if they walk away from this award - if it happens.
I don’t’ think that should be minimized.
In essence - maybe the student has to take one for the team.
But if going to an outstanding school like Lehigh, with added enrichment to boot which most don’t get (leadership, study abroad) is an issue - then it’s an issue 99% of kids in America would love to have. Everyone would take one for the team!!