I feel this will expedite Congress getting involved. Once representatives or senators feel their state is at a disadvantage they will act. Not sure of the end result but it will happen.
Also if the school pays I am not sure how you can now say they are not employees. That will create a host of other issues without regulation or legislation.
Their nil would be taxable, what about their scholarship, room and board, stipend etc.? Can they now unionize as employees? Can they be made to sign contracts? There is a lot of unresolved issues.