Earlier quoted context omitted.
Past adversity is in the past. So if someone grew up in a poor environment but you're thinking of admitting them to a good college on full scholarship, they'll soon be progressing at the rate they're capable of without the adversity. So the best predictor of future success in a good environment probably does include a correction for past adversity.
1) Why do you think their circumstances will change once they're in University? 2) There is the assumption that the environment in which you grew up in does not permanently affect the way you learn, while many studies have proven this to be untrue. The most critical years shaping the way you learn is in the younger years. Once you're past that, there is no way you can "make up" for it just by going to a better colleg…
2) Sure. Environment has both short-term and long-term effects. So a fraction of the environmental effects wear off. I dunno what the fraction is, but when you do the regression to find the weighting of SAT test score and adversity score that best predicts college achievement, it should find the right balance.