Why not play Billie Jean?
I pick the first one, just because I know that song lol. Do you actually have to perform in front of the other students or just a few people who audition you? When I started music school I just had to play in front of the drum tutor, and I played a Dave Weckl drum-along track, lol (which I went out of time with because I couldn't hear it when I was drumming to it haha). Most chances are they aren't looking for technical ability but instead they're looking for your feel for the instrument.
Remember, it's always harder playing in front of other musicians because they're nitpicking every little thing you do. So play it safe, play it simple with feeling, instead of technical with little mistakes and looking stressed. Your audience will be more impressed if you play it simple, solid and with feeling.
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