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With a graduation rate of over 90, where does the winnowing occur?

For elite colleges, it occurred in the admissions process. Because of the demand, these top schools can reject 90% of applicants, and still have every admitted with a 4.0 grade average and first chair violin or equivalent. Those students already know how to study and learn, and there’s no reason they should be weeded out.

And the greater number of students they reject compared to the number they admit, the higher their school ranking according to the US News school rankings. That is something that kept the U of Chicago out of some of the top spots. Another thing that keeps a school in a top ranking is having a low drop out or transfer rate. This is probably what was behind Harvard's notorious grade inflation. If they're getting great grades, they won't drop out and that will keep the rankings high. The U of Chicago is a difficult school and has a higher than average drop out and transfer rate. That was another thing that pulled down its ranking. A gigantic endowment also pushes a school's ranking toward the top. Get a good ranking, inflate the students' grades, ensure alumni support. Another hinky one is the neighborhood or urban setting. There has been some really weird gerrymandering going on in the ratings that keeps some schools' ranking up and others down. There are some places in the East where students have to take buses between campuses because it's too dangerous to walk yet their neighborhood crime factor is low because the "neighborhood" lines were drawn very tightly around each campus. But there are other places where surrounding police precincts are bad, though their own is quite good, and their neighborhood crime fact is high because the boundaries were expanded, causing their ratings to go down.