I've hired and interviewed a lot of people over the years. Mostly without the help of recruiters. I like to think I'm pretty good at that, actually. I always look for people that are eager to learn. I care more about what they don't know than what they can regurgitate because they did lots of silly online prep. If people are young and fresh out of school, my assumption is they are going to have to learn a lot in a hurry. So I look for people that are curious, eager, and have an open mind. The best way to do that is to get them slightly out of their comfort zone and talking about how they would tackle things. The signs I look for here are enthusiasm, ability to surprise with good answers, etc.
This generally does not involve code interviews; though I might ask some targeted questions about how they would deal with certain things in languages, frameworks, etc. they list as being proficient in. I've of course worked for some people that insisted on me organizing code interviews and it's a chore and IMHO you learn absolutely nothing that isn't obvious if you just casually talk to people for 30 minutes or so. I usually argue against such things and prefer just talking to people directly.