Working hard and grade inflation are not mutually exclusive. There’s no doubt that the education at top schools is rigorous and that students work hard there, but even the faculty at the Ivies will admit to you that they practice grade inflation. One professor once told me point-blank it’s partially to keep their students in competition with the others: if all the Harvard and Yale students are coming out with 3.8s but the Columbia students are coming out with 3.4s, the HY students will get into med school/law school/plum consulting jobs and the Columbia students will get left out.
But that’s besides the point. I think the most important thing that supports graduation rates at Ivies is that admissions officers select students who are likely to succeed there and the support services at these places are out of this world. For example, at my great small LAC professors were responsible for advisement of students in selecting classes and solving other academic problems. At Columbia, there’s an entire Center for Student Advising with a phalanx of advising deans whose sole job it is to serve as academic advisors for Columbia students. That can include things like helping students as for extensions on papers when necessary (your claims of illness are much more credible when a university employee emails me to back it up), getting into classes necessary for graduation, deciding whether to take the D or the W, and figuring out a class schedule best suited to one’s chosen career and interests. Advising deans also help coordinate services across the university - so they may make a counseling appointment for you if you need that, help you get with disability services if you need that, encourage you to join X or Y organization if you need that.
There are relevant/similar jobs at other top schools, too. Harvard has this residential dean-type position often held by recent PhDs; their job is basically as the academic advisor of their house, a resource that undergrads can go to when they need help. And so on.