In my school they used A1 (or some other A) licences for students. They are probably cheaper than other licenses but they are not free.

I have no idea if they have opted out the competition (whatever that means).

Our class never used any normal windows client OSes (on bare metal anyway). We primarily used Windows server evaluation or Linux depending on the course. I think the other classes primarily used VDI.

Do you have a source for this:

Microsoft will gracefully give lower licensing costs for students if the school opts in Microsoft and opts out the competition.

And what do you mean by opt out? Do they sign a contract saying that they won't use Linux? That seems extremely unlikely, why would they even care? Seems more likely to be an IT policy because they want to manage the devices or they don't want to provide support for non Windows or Mac devices.

If you have no evidence or source, do you know for sure that it's happening (as in you worked in IT or similar role for the university) or it's a rumour you heard?