Received the job in jeopardy notification email letting me know administration is looking for conference championship. I have not had a lot of success in recent D1 position. 1 bowl in 4 seasons, wins have increased and roster is better but doubtful I can win conf. championship this season.  

Question is should I go ahead and apply for a lower level position, taking a step backwards, or stick it out?

I would stick it out.

Once they fire you, you will likely the job change after the firing be eligible for quite a few of the 1A jobs. It seems once the firing happens most guys are a desired commodity again. Go figure.

95%+ of the time, a bowl win will save your job. (There have been coaches that have been fired after winning a bowl though it is rare.)  IMO you should stay.  You will probably qualify for a better job getting fired from NC State then you would by applying for another.  If you drop down to a very good D1aa school for a season or two and move back up, it will improve your chances for a better job, IF you have solid success. (success= playoff appearances/win(s) and 10+ win seasons)

Thanks for the information. I think I will stick it out and see what happens.