Exactly, except it is possible to go to a community college or state school that admits almost everyone (like Arizona State), work hard in college, and be very successful as well. But the real problem is when you have predatory colleges convince people who probably aren’t interested in college to take out a ton of debt.
But you’re right that this whole thing is solved if students were better prepared coming out of HS.
It’s a huge problem at the ivies and other elite universities. Not really a problem at what I consider to be the “very good” universities. Legacy admit is a bit of a misnomer though because it’s not really the students who are children of alumni that get a big advantage, but the ones who are kids of the very rich that make donations to buy admission spots.