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A university like Yale, say, might do the most good by only accepting students with poor-to-average grades and test scores. Such students might get the most from the intellectual environment and social connections. 2/3
Intellectual ability is literally the ability to benefit from intellectual stimulation, speed of learning, capacity for abstraction, etc. Smarter students benefit more from quality education, almost by definition.
Smarter students will reach higher peaks. But "benefit more" is wrong; there is diminishing marginal utility & ceiling effects. Eg, someone who never heard of psych can learn a lot from a course from you—almost certainly more than someone who is already pretty knowledgeable.
Would you apply this logic to the best basketball camps or acting schools or singing classes? It seems to me that one can make a strong moral/functionalist argument that we all benefit when we boost the skills of the most talented people.
The difference between selective institutions and the rest of us is not really in the educational experience. We all use the same books, the same SLOs, etc. The difference is the networking and signaling, which would be as available to students with more and less intell. ability.
So you'd want students with IQ 150 and students with IQ 80 in the same seminars? In my experience, that doesn't work well for anybody.
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