Sims are not accepted in any of the universities. However, they can still enroll.

"EgonVM;c-18063767" wrote:
, but if your sim graduates with honors (GPA A+), the benefits will be the same as distinguished without honors.

That actually depends on which career you go into. For some careers graduation with a regular degree with honors start 1 career level lower than distinguished without honors. For some it even is the same career level start regardless of degree type and/or honor status. This page details them all.

You also lose out on the potential to earn the distinguished degree scholarships, so that's an additional downside.