I can't speak to what goes on in FAANG recruiting, but I was involved in hiring for a smaller company that recruited heavily from regional schools. we absolutely knew which schools were harder, as most of the younger engineers had graduated recently from that same set of schools. obviously GPA doesn't tell the whole story, and we preferred to decide based on work experience. but for junior hires and especially interns, there's not always a lot of signal to decide on. all things being equal, we would prefer someone with a 3.0 (or even lower, with a good explanation) from the rigorous stem school over someone with a 4.0 from the well-known party school. which is too bad, I'm sure there were some very bright people who went to the "party school", but their grading policy made it very difficult to distinguish them from their peers who barely had a pulse.
