Research on student selection mostly focuses on accepted applicants and the effects of selection procedures. In this sense, most samples seem to be biased, which is well-reflected in the literature. The present study investigates student selection regarding students who had been initially de-selected but finally succeeded in the admission process. Our results show that students from the de-selected group reveal lower performance, i.e. higher dropout, and thus lead to decreases in relative organisational performance. We argue that higher education institutions may be confronted with a performance dilemma if external stakeholders prefer institutional growth, and internal actors prefer maintenance of educational standards. In this situation, reduced graduation rates have the potential to undermine the output legitimacy of higher education institutions. Therefore, we recommend focusing more on the balance between academic standards, stakeholders' demands, and processes of student selection. From a theoretical point of view, we suggest broadening the perspective and combining selection theory with organisation theory.