Colin:
Personally, I'd do neither of the above. I don't think that it is any business of the government to be sending anybody to college. I'd say, let's spend the $35K on something the government really needs to be doing, or better yet cut taxes by $35K.
Now, for reality -- there really isn't any $35K savings, anyway. Not when you take into account the fact that the taxpayers are paying for all of those appeals, and those aren't free, by any means. It turns out that it actually costs MORE to carry out the death penalty than it does to just incarcerate the villian for life.
I'd say, we need to streamline the capital punishment appeals processes (note: streamline, not eliminate), and then use the savings either in a more appropriate manner or reduce taxes by that amount.