Grade Inflation

As students return to school, it's time to consider the issue of grade inflation and its long-term effects on the economy.
The following essay appeared in Phi Kappa Phi Forum, the magazine of the National Honor Society of Phi Kappa Phi, in the Spring 2012 edition under the headline "Sliding Through Means Sliding Down."

By John T. Harding

Grade inflation at American colleges and universities undercuts more than the ivory tower. Giving high marks to undeserving students also undermines companies that hire them. Grade point averages at all U.S. schools rose from 2.93 for the 1991-92 academic year to 3.07 a decade later and stood at 3.3 at private schools and 3.0 at public schools in 2010-11; education researcher and former Duke University professor Stuart Rojstaczer reported these figures on his website gradeinflation.com and in “Grading in American Colleges and Universities,” an article he published with colleague Christopher Healy in the March 4, 2010, edition of Teachers College Record. The economic consequences of this false accounting in academia jeopardize the bottom line of corporate America, creating a major problem for both sides.

Causes of grade inflation

“Grades are the primary currency of academia,” note Rojstaczer and Healy in “Grading in American Colleges and Universities,” and “like any currency, it would seem that grades are intrinsically subject to inflation.” Why? The reason isn’t clear, they write, but “a likely influence is the emergence of the now common practice of requiring student-based evaluations of college teachers.” Professors may grant higher grades than merit calls for to increase their popularity among students and bolster job security and advancement. Moreover, the major purpose of grading, the researchers add, “changed from an internal measure and motivator of student performance to a measure principally used for external evaluation of graduates” — potential job applicants.

Complicating matters, some grading systems don’t assess students accurately. Take grading on a curve. Elementary statistics stipulates that the bell-shaped curve is valid for a large sample over time, since this configuration reflects the general population. But the curve is inappropriate for some groups, such as a class of 30. A single-classroom sample is simply too small for formulaic restriction. Plus, some professors refuse to grant more than a handful of As or Bs even if more students deserve high grades. Further, some professors might sympathize with students who need a certain grade to be eligible for financial aid. And some instructors are so good at their jobs that many students do well in their courses.

Effects of grade inflation

An October 2009 study by the Center for Excellence in Teaching and Learning at Minnesota State University at Mankato concluded that persistent grade inflation can mean “a cheapening of the value and importance of both a college degree and academic honors” and “the lack of consistent and accurate information to potential employers about the skills of a university’s graduates,” among other troubling ramifications. Thus, “employers place more emphasis on the work experience of college students in the hiring process. This forces students to work more at a job and study less in college.” Meanwhile, “students are increasingly disengaged from their studies, and the literacy of graduates has declined,” according to findings cited by Rojstaczer and Healy. And there remains the tactic of students taking snap courses for easy grades.

Increasingly, the purpose of higher grades seems no longer proof of superior learning but as a ticket to a job. A consequence of this failure of accountability is a drag on business. Economic growth happens, according to Partha Dasgupta, professor emeritus of economics at University of Cambridge, “when people acquire knowledge and make use of it, or when people make better use of what they already know.” (Economics: A Very Short Introduction, Oxford University Press, 2007).

As Milton Friedman, Nobel laureate in economics, put it in his 1962 book, Capitalism and Freedom, “[T]he rate of return on investment in training is very much higher than the rate of return on investment in physical capital.” The University of Chicago professor continued, “This difference suggests the existence of underinvestment in human capital.” His insight applies to grade inflation in a number of ways. If a better educated workforce is more productive, the opposite applies as well. A grade that becomes easier to obtain has less value than those issued earlier to others and the store of knowledge it purports to represent is diminished, causing employers who might base hiring decisions partly on transcripts to come to faulty conclusions. Result: A firm gets a lower return on investment because grade-inflated hires are less qualified and proficient than their counterparts. The costs involved then affect other parts of the business and eventually the bottom line of profit or loss.

Implications of grade inflation

Inflation, whether of the money supply or of academic grades, devalues the unit of measurement. Grade inflation dilutes the worth of an education just as monetary inflation decreases the value of a dollar. If a dollar no longer buys a cup of coffee, an unearned A no longer demonstrates mastery of content. And as makers and drinkers of coffee suffer, so do college students and businesses that employ them.