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Let's say that a person born as a man self-identifies as a woman. At which stage of their transition process would they be allowed to claim themselves as a woman in the context of college applications or scholarships? Is merely self-identifying as a woman sufficient? Or maybe legally changing your gender is required?

Or if we look at it the other way around - at which point would a person born as a woman be required to identify themselves as a man in college applications?

Note that this question is of practical value as there are presumably hundreds of thousands of people in the US who self-identify with a different gender.

Virtually all universities will follow the policies regarding gender identity that are promulgated by the U. S. Department of Education. To do otherwise would mean putting their access to federal funds at risk, since Title IX of the Civil Rights Act bans discrimination on the basis of sex by any institution that receives federal government assistance. Many institutions have an official statement somewhere (on their Web site, in the course bulletin, etc.) stating that the abide by these federal guidelines.

The Department of Education enunciates their interpretations of the law through what are known as "Dear Colleague Letters." The ones covering the question of how gender identity is defined may be found here, on the agency's Web page. In light of the current political situation, the Department of Education's rules cannot be seen as stable, at present, but the current state of guidance can be found there.

In the US, every university is different, though some State systems have several universities that follow the same rules.

In general however, your gender is self defined. You are what you say you are, though some people will want to argue with you about it. Gender is a very complex phenomenon, and none of the aspects of it are purely binary. There is your "plumbing", which has more than two forms. There is your brain, which determines how you think of yourself. There is your hormonal system, which has something to do with how you feel. None of these are binary and for some people they are in conflict with one another. Trying to give a formal definition is a fool's game, though some try to play it.

You are what you think you are. Universities are more likely than not to respect that, with some exceptions for religious colleges. It isn't so simple/nice for pre-college education which can be overly influenced by conservative political/religious factors.

The news in the past couple of days has indicated that the current administration might try to "define-away" transsexual people by defining your "sex" as your plumbing at birth. But, funny thing, that isn't binary, and some people are born with intersex (mixed) genitals. Humans are complex. Trying to define us to be simple, is, again, a fool's game.