I'm not sure what you're proposing with (A) - if you are proposing that you will return home without going out of status, then seek a F1 through the embassy in your country, I'm not sure what you're worried about. If you're planning to overstay, the consequences of that decision depend in part on the length of your overstay, but you also run the risk of convincing the State Department that you don't intend to return home at the conclusion of your authorized stay.
If, with (B), you are proposing that you remain in status under a J1 visa and then attempt to change status to F1, with no home country residence requirement, that should be possible. (With HRR you cannot change status from within the U.S.) My guess is that your college has an immigration advisor - I suggest discussing the details of your situation with that person.

