You don't have to speculate, this is reality in Europe. An important part of these systems are the limits on the number of students admitted to most programs.

You don't have to speculate, this is reality in Europe. An important part of these systems are the limits on the number of students admitted to most programs. For example in Hungary there are centralized final exams at the end of secondary school (age 18-19) and you get a score at the end. You can apply to several universities at the same time, in a preferential order. Then, each year, an algorithm goes down the list of all students ordered by their score and allocates them to their topmost choice where there's still room. (Also there's no "soft" and subjective bullshit, like essays about your motivation and proofs of "well-roundedness".) This way the state can focus the subsidy to educational fields that will benefit the economy more, while still subsidizing a certain number of places everywhere. (Of course if you don't have enough points, there are further, paid places as well.)