Im confused, is it illegal to use quotas ( affirmative action ) in the selection of students at universtites?:
It is legal to use race as one of a number of factors is determining admissions.  This was decided by the Supreme Court (Bakke decision).  The ruling stated that race cannot be used as the primary factor in determining admissions, but can be used as part of the decision process.

Although no company will ever admit to quotas in the job market, it does exist.  Diversity is the new way of life to many people.