Why doesn't academia incorporate spaced repetition in higher education?

In higher education, if there is information to be memorized, students are generally expected to do that themselves, in their own time and their own way. This is unlike primary education, for example, where teachers may use class time to help students memorize things.

So spaced repetition "is not formally applied to higher education" because generally, in higher education students are responsible for learning the concepts presented in class on their own, outside of class. I'm not aware of any technique for memorization that is "formally applied to higher education."

Most universities do offer students some advice on how to study more effectively, and this advice often includes information on spaced repetition (though it may not use that exact terminology.) See e.g. this UW page or this NYU page.

In tertiary education, it is the responsibility of the students to pick appropriate learning methods. It is simply not the task of a university to incorporate spaced repetition or any other learning technique, because revising and repetition is something that students have to do on their own. Bluntly put, if students "exhibit [an] illusion", that's something students must fix, not the university.

What could be done at universities is inform students about techniques such as spaced repetition (and I am not convinced this isn't already happening one way or another).

As you say, some universities pay attention to assessments of education quality. Certainly, such assessments are not looked at for their own good, but because some other decisions are based upon them. For instance, funding for a university might be influenced by results from an assessment, but if the respective funder does not take into account retention of learning, there is no motivation to try and influence this aspect. Likewise, some kinds of assessments may be paid attention to by marketing and PR departments of a university, while they are of little to no interest to the actual teaching staff.

Then, if an aspect is not covered by any assessment the institution considers relevant, the decision will be made based upon what the teaching staff considers most beneficial (usually in an uncontrolled process, by each teaching staff member individually). And this can well mean to give students some more responsibility in order to help them evolve into autonomous professionals.

Now, if you ask why external assessments do not take into account retention a lot, that is quite a different question, and its answer has to do with a mixture of ignorance and convenience:

• Ignorance because the people who set goals for such assessments know little about the individual subject areas, and also design the assessments in a subject-agnostic way, as the (possibly unrealistic?) expectation is to also make very different subjects comparable. Depending on the assessment, it may also be a design goal to make the assessment results comprehensible without knowing anything about the subject.
• Convenience because "We do not know." or "We will see in X years." are too impractical answers, even though they might be accurate. The assessments are probably designed with the idea that once the assessment is over, there is a final and definitive result about the current state/quality of the university. This in turn favours a disregard of aspects that need to be measured over prolonged periods of time, such as retention long after an exam.

Spaced repetition is indirectly present in higher ed. We have all heard the humorous phrase that an ms is "more of the same" and a PhD is "pile higher and deeper". This implies that there is indeed some repetition from undergrad to grad school.

However, it's not enough to just memorize the content. Students are expected to go "deeper" in their expertise and to critically apply this knowledge through extending through conducting research.

At each level of education familiar themes are explored again at a more sophisticated level. By default old simpler concepts are reviewed before adding the next layer of knowledge. This reviewing of familiar material is an opportunity for spaced repetition and perhaps an example of constructivism