It would require colleges to look at transcripts and GPAs a little differently, though, but not radically so.
They are looking at rigor and GPA, so in this case, they would look at the level of each subject that is mastered and the associated GPA. So students would reach different levels of math, based on their math abilities, and, within each group of students who achieved a specific level, there would be different GPAs, based on how well they do at each level.
It would be really helpful for those students who are academically strong, but go through a difficult time. So rather than having a D or an F sitting on their transcript, never to be removed, they could catch up, maybe through summer courses, or another method, and end up at the same level that they would have been, had their parent not been going through a divorce, or had they not had to be hospitalized for three weeks. Yes, a counselor can write about this, but that is only useful if the AOs are reading every application carefully, which is not usually the case.
I think that people forget that the problem of grade inflation is not that it increases that average GPA of the graduating class, but that the problem is the ease at which As and Bs are achieved.
This methods does not make an A or B any easier to achieve. In fact, teachers will be a lot less reluctant to give a student an I, as opposed to a D or an F, since it doesn’t destroy the student’s GPA, to keep them from graduating. So there will, in fact, be fewer students getting Cs who have not achieve C-level mastery of the material.
Moreover, the increased average GPA would be because students would actually be achieving Cs, Bs, or even As instead of Ds or Fs.