I would point out that school B in your example is not making an allowance for the time of the individual. School B is only virtuous in your example if you value the time of those 40% at $0. If someone quits their job to attend a program, regardless of getting a refund, there is a measurable opportunity cost to them wasting their time in a program they would not be successful in.
This is why the Guild has free part-time/online introductory courseware to help people who are not ready for the intensity and depth of the program self select out before they invest an adverse amount of time, effort, loss opportunities, and potential physiological harm (stress, self-esteem after failing, etc.).
We chose to be selective up front because I believe a refund 4–6 months later will not make a person whole if you deliberately admit someone who is not ready to be successful, regardless of their demographic.