This was in the 60's, before computers.
College admission was in the spring of senior year of HS, just like now, but final grades were mailed to the colleges. Somehow, they didn't figure this out until he had been there for 2 years, and by then he was one of the top few students.
They decided to let it slide.
Remember when the whole counrty ran on the principle of doing the right thing instead of blindly following the rules? There was none of the current "zero-tolerance" thinking.