That would be all fine and good if there was support systems that actually helped those whom needed it. FAFSA even at it's maximum amount doesn't cover that much, and it certainly won't cosign a private loan.
These kinds of "merit based" scholarships are everywhere and overwhelmingly taken by those whom don't even need a college degree. The only thing different with this one is they plaster LGBTQ over it the same as Apple or Google will wave rainbows around. That doesn't actually target the community that needs it.
What I'm interpreting from you here is: "these well off middle class kids deserve this more because they're well off middle class kids that can't afford the California schools.". That's elitism.