My guess is that the college does not want to allow students to dump their mostly-garbage on the neighbors.
At the same time, wealthy students who will throw out items of value may feel they have better things to do than separate out items to donate. That’s especially true if they wait until the last minute.
Overall, separating items to donate from one’s trash is a way to avoid paying to dispose of trash at the dump and a way to perhaps be charitable or environmentally conscious. I’m not convinced it’s all that effective as an altruistic move. If the college sets up a place to dump for free, I’m not at all surprised many people take advantage of it without another thought.