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why limit it to only high school graduates?
You generally have to graduate high school or complete the GED to be eligible for enrollment in higher education. This has nothing to do with ability, it's just the minimum for entry
I would assume those who could actually reasonably pass.
Saying that, over here you automatically get uni entrance when you hit 20 so those who grew after high-school aren't disadvantaged. Have somethings similar would be good.
My guess is it has to do with effective use of resources. The tuition is free to the student but not the taxpayer. Teachers and administrators don’t work for free. If you can’t get through state funded education up to high school then the chances probably aren’t great for college. Those seeking a second chance could always complete a ged and get the benefit, hopefully.