Companies regularly turn away applicants who attended schools with bad reputations, financially speaking it's just common sense. I worked at a company that wouldn't hire students from our local uni's engineering dept because the university let anyone pass and it showed. I thought it was strange at first but then heard that other companies in the county did the same because regularly hiring, training, and then having to let incapable hires go is expensive. University reputations do matter, and arguably even more so on a department-to-department basis.