I will say a situation like this is coming up at my company. The dancers are questioning the casting decisions of the artistic staff, as they feel others may be better suited for roles, or they may not be. Even in a union company (as stated in the contract) casting is always the decision of the artistic director. It's not up the talent to question whether or not someone is right for a role.
The same goes for those of us on the production side. Unless the company is a co-op and you are a partner who has equal say in who gets selected for which position, it is ultimately the PM's decision as to who is a SM, ASM, etc. You don't know this student's background, and it's also not your place to judge their ability. It's generous that the PM is asking you if you would be willing to allow this other student an opportunity. Unless you signed a contract for the position for next semester, they can change their minds and select someone else. Don't think about the other student - focus on yourself and why you want to keep the position.
If you feel you really want to SM the project, state the reasons why you want to stay with it. Don't talk about the fact that the other person is a freshman, a recent major, or has a lack of experience - in truth - that person doesn't matter right now, you do. Who knows, the PM may recognize your passion and decide to keep you in the SM position and decide themselves that the other person should be the ASM. Or perhaps they feel you are strong enough for other things. Just be honest, but focus on yourself.
I myself was a recent switch to a technical theater major - I had only been a minor in theatrical studies. I got put on a show my freshman year. None of the other students knew me, nor did they know my personal experience SM'ing musicals, straight plays, being a performer, musician, etc in high school and in community theater before coming to college. Don't judge - we all have to learn some time. What better place than in the safety of an educational setting?
