1)Whatever metric you are looking to determine merit, whether it is University affiliation, GPA, or performance on a coding evaluation, don't think of the result as a single number. Think of it as a range. Even a probability distribution. The mean value of technical merit may be higher but the variance is so large that the metric may be meaningless unless you have a large number of applicants.

2)Whatever metric you are looking at, recognize ahead of time that you might be getting it wrong. So you might want to include a sample of candidates from the rest of the pile just to evaluate your evaluation methods. Unless you are the type of company getting dozens of applications from people at top schools then this shouldn't be a problem.

3)Hiring somebody right out of college is a roll of the dice anyway. No matter what their ability, you have no idea how well they work with other people, how well they listen to instructions, or how well they can handle the grind of the 9-5. Once you get to the interview phase I would look more for maturity than technical merit so long as they meet a minimum acceptable criteria. But I also suppose this depends on what stage your company is at.