After a leavers' day service at a leading academic London school recently, parents approached each other cautiously. Even a decade ago, it would have been a given that their children would have places at top universities. Now there are no such assumptions. We shook our heads over glowing scholars and models of leadership who were leaving school without university offers, despite projected A-star grades. The A-star is intended to correct the inflationary use of the A grade, but it has proved no match for the recessionary rush to universities.

I do not believe there is an organised bias against private and grammar schools, although many fee-paying parents have developed a paranoia about this. Urban myths abound about revolutionary aggression towards the intelligentsia. One very clever independent schoolboy I know was given an E in his AS history exam last year. Bewildered teachers appealed – the re-mark came back as an A. It looks more like chaos than conspiracy to me.

There is an idealistic and commendable view that universities should be for the talented rather than the wealthy. Yet this has to be squared with the fact that universities are as short of money as everybody else. It is not "political correctness" that is keeping out the traditional, university-going classes, but foreign students, who are keeping universities afloat with their top whack fees. Applications from abroad are up by 15 per cent. The number of applications is swelled by mature students. It is a variation of what is happening in the job and property market. Education has become one more thing out of reach of the young.

Furthermore, social inequality is no better. The combing of parental background, the scrutiny of personal statements, the straightforward demographic warfare of universities such as Edinburgh stating that they will treat applications south of the border as second class; none of this has achieved the holy grail of more first-generation students.

A more erratic picture emerges: universities are starting to look like immigration centres. There is a stampede of the deserving, but then the places run out. So naturally, the rejected bright are pushed back along with the mediocre. Too much demand, too little supply, muddled selection.

Perhaps we have to give up on the ideal that every good student deserves a university place. Hard work and excellent exam results do not necessarily have academic consequences. This year's unprecedented 225,000 university rejects are coming to terms with this.

As ever, the young are proving tremendously flexible and resilient. The university rejects that I know are philosophical rather than bitter. They are trying again – different courses, different universities. They are working and travelling and doing charity work. Those with wealthy parents are simply flying out to the best American universities. This looks to me like unintended consequences.

We recognise the right of rich foreign students to come here, yet treat our own alpha pupils as a statistical problem. Aren't we now too dependent on foreign talent and wealth? And what of the political incoherence in turning down British students in favour of monied foreign ones? Surely the answer is to come clean and emulate the Ivy League. Let rich British students pay, and subsidise the poor ones. Equal opportunity for all has turned into a creaking admission system and a proposed tax for life for those who prevail. The reward for effort has never looked so unappealing.

Sarah Sands is deputy editor of the 'London Evening Standard'