Hi! I've answered this question(in a fashion) before, when it was asked about why the oldest schools of higher education in America are the most prestigious. Here's the thread for that one.

Luckily, my example was Harvard, so I'll give a short summary here for anyone reading, and the in-depth one can be found through the link above. The very short answer is that it is prestigious, and prestige attracts demand, and this means supply is limited.

Firstly, Harvard was the first University to be founded in the New World, and that alone carries a certain amount of prestige attached to it. Secondly, the only people who could afford to go to Harvard at the time of its foundation were the elites of the colony. The sons of wealthy families were educated at Harvard, and their progression into family businesses, politics, and the social elite of the colonies further added to the prestige of Harvard.

Prestige is important because it adds to the desirability of the school for prospective students. From there, it becomes a matter of supply and demand. As the demand for places at the school grows, the supply can be sold at a higher cost. Now, I'm not referring here to a monetary value, but rather an intelligence value. With more and more people wanting to go to Harvard because of the prestige factor, Harvard is able to be very, very selective of who it accepts. This means that as well as being selective on gender and ethnicity(as Harvard was), the school was also able to pick and choose the brightest students to attend. When the numbers who want to go to the University are so high, it is easy for the admissions department to select the best students. Of course, this sometimes goes awry when you select someone based on family rather than intelligence.