"So many HNers complain about how the younger generation is hyper-competitive yet when universities start taking steps to help reduce that they start kvetching."

Dropping a semester of grades is a cover up for the symptoms, not a fix. A better fix would be stress management and realistic expectations. Building your identity or self-worth around going to a particular school is the insane part. It's great to have big goals, but you have to separate those goals from defining you. It seems many kids today don't make that distinction. Pick a cheap state school with a decent program, get a scholarship, and start living life. All this prestige and pedigree is the type of stuff we should be trying to destroy.