The Arcane University doesn't select for talent—it selects for submission.
Kvothe arrives already magically gifted, calling the Name of the Wind since childhood, something most Masters spend decades learning, yet the University's response isn't to accelerate him or recognize his aptitude but to tax him.
It makes him re-prove fundamentals he's mastered. Each barrier—the Fishery, Eolian humiliation, years of unaffordable tuition—is designed to test not whether he can do magic but whether he will accept arbitrary postponement of his own competence.
The specific cruelty is this: the Masters know what he is. Alar knows. Elodin knows.
The Wise Man's Fear makes this visible because it strips away the merit fiction. There is no merit test at the University—there's only the willingness to be kept waiting.
Read David Graeber's 'Bullshit Jobs' essay on credentialism (published in Strike! magazine, 2013) alongside Kvothe's tuition crisis in The Wise Man's Fear—Graeber documents the exact same system Rothfuss fictionalized.
Patrick Rothfuss's interview with Wired (2014) where he discusses the University's design choices and admits the institution was partly modeled on his actual MFA experience—he never confirms whether he was conscious of articulating the gatekeeping mechanism itself.