Admission to highly selective institutions offers a pathway to upward social mobility, particularly for low-resource students. However, entrenched wealth disparities in the United States present serious challenges for admission officers at highly selective institutions. Utilizing individualized holistic review (IHR), including letters of recommendation (LOR), and contextual consideration, highly selective institutions aim to account for wealth inequities. This quantitative analysis, conducted at a highly selective research university, examined 95,326 applicants across 4 years to explore if admission officers' internal assessments of LORs relate to contextual independent variables beyond students' control. Statistical methods, including ANOVA, Two-Way ANOVA, Chi-Square, multiple linear regression, and logistic regression, were employed, controlling for standard measures of academic readiness. Findings revealed higher LOR assessments for students facing greater contextual challenge levels, underscoring the ability of the admission process to identify high achieving students from high challenge contexts. Paradoxically, elevated LOR ratings were also observed for students from private and smaller schools, indicating a nuanced interplay of factors in the admission process. Importantly, LOR assessments significantly correlated with admission outcomes, emphasizing the pivotal role of LORs in highly selective college admissions. This study reveals the nuanced role of LORs in admissions, exposing their potential to tackle inequities. It calls for improved IHR training and heightened consideration of contextual variables, offering a crucial contribution to advancing equity in highly selective institutions, fostering more informed admission practices.