Recruits are spread throughout the country based upon population density (real life), number of colleges in the area (GD), the division of the colleges in the area (GD), and the traditional location of many recruits (real life). This results in a situation where every school at the DIA level has about 12 DIA level recruits within their state/close recruiting range (this number increases as you go down the divisions so that recruiting becomes much easier).
The positions of these players is random, so you may need a RB but have none close by, but you may need a WR and have 3 close by to choose from. This means luck does play a role. Our current perception is that this setup works well and creates a fair recruiting landscape that encourages more recruiting battles within the upper divisions, which increases the challenge of the game, while giving newer coaches more leeway in learning how to recruit at the lower levels.