Now that I have a 9th-grader, I am starting to think about college admissions. The urban myth is: "If you were applying to college now, you'd never get into the (great) college you went to (in the 1980s or 1990s)."
This belief is driven by lower acceptance rates at many elite colleges, as well as the parents and peers of those who went to elite schools. This washington post article debunks this myth. It refers to an article about a study at the Center for Public Education, which has more detail. On the other hand, this paper shows that while overall selectivity fell, the top schools are more difficult to get into, at least as measured by SAT/ACT scores.
Here are some factors that could be at play:
1) Regression to the mean. People who went to great schools are, on average, high achievers compared to the general public. However, if you take the cohort who were accepted to these schools, some fraction will have gotten in by chance, scoring better or doing better just by chance. The next generation will regress to the mean, and this means it will appear as if colleges are more selective,. among those who went to more selective colleges (by the same token, among those who went to the least selective schools, there will be the opposite effect)...all else being equal of course. This is the same effect that results in the children of the tallest people being shorter than their parents, even though they still may be taller than the average person.
2) People apply to more schools. When your average person applies to 10 schools, whereas the average person used to apply to 3, acceptance rates can go down, resulting in higher perceived selectivity. This article shows the number of people applying to four or more schools more than doubling since the 70s. The increase in applications might also imply that students that never would have applied to, say, Harvard, are now applying. This is why a lower acceptance rate doesn't actually mean it is more difficult to get admitted, once you adjust for the quality of the student.
3) Slight increase in actual selectivity at a few schools. The New York Times had an interesting article regarding the changes in selectivity, which focused on the number of spots per 100,000 population (rather than the number admitted). Harvard, with the greatest drop in selectivity, had a drop of 27% (the article focused only on US student rates) in the last 20 years. While this might seem large, keep in mind that their admissions rate has dropped about two-thirds, from 18% to 6%, a much larger change.
4) Student quality improved. There is certainly room in the equation for a true increase in student quality. As the article above implies, the top schools did have moderate increases in test scores.
No matter whether college is the same or more difficult to get into, it certainly appears that it is more stressful. One solution for this is the med school solution (and NYC schools solution): a ranking and matching program. This is fairly simple and goes as follows: each student ranks each school he/she applies to in order of preference. Colleges rank the students that apply in order. Colleges are matched students that are highest on their list, beginning with students who ranked them first. Students are required to go to the college they are matched with, or enter a second consolation round.