Over course it is being oversimplified. Yet the fact of the matter is that smart people do not spend extra tuition – especially money that they do not have – attending colleges that they cannot actually afford. Occasionally people make the mistake of taking out heavy loans to attend expensive schools. Sometimes it works out, and sometimes it doesn’t. Money is a huge factor at elite schools. Tons of equally talented students attend state universities.
To make an analogy, people don’t buy a Mercedes Benz in order to have a better commute to the office. Either they really like what Mercedes has to offer, or they want the status (usually the latter, but BMW drivers tend to choose the former). They pay handsomely for whatever makes a Benz special. A Camry will get them to work just as quickly, at less than half the price, plus is both more reliable and more durable.