Just to clarify some things about the Festival of Champions:

1. It's a one-per-decade event. Like Nyx said, it didn't happen for his academic generation. This current semester happens to be that 10-year mark.
2. When the bottom five classes are expelled, it only means the students in those classes are expelled during that semester; those classes aren't purge completely.
3. This event is part of that mindset of Avalice only wanting the best to graduate, so they cull the herd so to speak to prevent wasting time and resources on those they deem won't have any chances for graduation.
4. Avalice has been doing this since its conception but that will be delved into later on when we reached that story arc.