I am a contracted Cadet on active duty scholarship. I am prior service reserve and I plan to transfer over to the NG after this semester. I am not going to be staying in the state I go to school in after graduation. I want to drill locally and go to AT here as well but I do not want to be slotted into the local unit/branch.

I was told be a recruiter that I NEED to be slotted into the unit here (Infantry) in this state in order to drill. I think he is just trying to fill a tough slot in a tough branch to get credit. I thought I could find myself a unit that had a slot, in whatever location and if they were willing to take me on I would belong to them and after graduation that would be my branch.

I want to join the NG with another state, but still drill/AT here because it is local until I graduate... it would be just like RST. Am I right? Is the local recruiter blowing smoke up my ass?

You do have to belong to that unit in order to drill. That being said, just because it is an Infantry position does not mean you will automatically branch there. It depends on the needs of the state as well. Meaning, you could end up being an engineer or what ever the state is short on. But you still can not drill or do AT without belonging to a unit. Since you will be a cadet it will have to be a unit in the state you are in.

It is allowed/possible by NGB reg to be a NG member in one state yet drill in another state. However, you must have the permission from the TAG's of both states (I've also seen it worked out at the unit/battalion level). Not too hard to get for good reason such as live in one state with school in another. And it takes regular monthly contact/cooperation between the 2 units involved. Most of all it takes you being on top of ensuring the commo needed happens.
How you stay a Cadet while doing this; I have no idea. Good luck; cul8r.