It may make the financial aid package all grants for instate if 100% need is met in addition to free tuition? That is, because of the free tuition, Pell grant goes to room&board, leaving about 6k to cover - through work study, student /parent contribution and/or loan. I could see where it’s make it possible to have no loans or to reduce loan amount.
Also, for lower and middle income students, ‘guaranteed full tuition scholarship if you can get in’ is a powerful incentive to apply.