The Pernicious Effects of Grade Inflation

Higher education is suffering from many woes, and the federal government (and sometimes Donald Trump in particular) often gets much of the blame for them. But one factor that, in my judgment, is ultimately responsible for much contemporary collegiate angst probably cannot be primarily blamed on the feds: the effects of grade inflation.

I would submit that this affliction is the predominant single factor in the precipitous decline in student learning in American colleges and universities.

Grade inflation has made universities an increasingly dubious value proposition. Combined with long-term rising fees for college attendance, grade inflation has made universities an increasingly dubious value proposition: Attendees, their parents, and the public are paying a lot for each bit of knowledge, wisdom, and virtue gained in the college years.

This problem made the news recently when the dean of undergraduate education at Harvard, Amanda Claybaugh, released a report noting that a large majority (over 60 percent) of grades awarded to undergraduates recently were “A’s,” compared to just 25 percent 20 years ago. The report concluded that the current grading system is “damaging the academic culture of the College.”

This problem has been festering for at least half a century. Why has it taken so long to recognize? Rival Yale’s data are seemingly even worse, with 80 percent of grades awarded in 2023 being “A” or “A-.”

My first reaction: This problem has been festering for at least half a century. Why has it taken so long to recognize and do something about it?

Before getting into too much detail, I wish to emphasize that grades are primarily a very useful and important information device, one that, properly functioning, should allow observers (such as tuition-paying parents or scholarship donors, potential employers, or graduate and professional schools) to separate the best and brightest of students, as determined by their academic performance, from the less distinguished ones. If nearly all grades are virtually the same, the ability to separate the truly spectacular student from the average or mediocre one is largely destroyed. Why chance hiring a Harvard graduate if there are real doubts as to his or her competence?

This problem has been brewing for at least 75 years, according to a brilliant polymath, Stuart Rojstaczer, who, over a lifetime, went from being a professor and geophysicist at Duke University to amassing a large database on grade inflation at numerous public and private universities to later writing literary fiction and performing professionally in a band.

While higher education, despite being in the creation-and-dissemination-of-knowledge business, has generally concealed from the public the performance of its own students (probably in part to conceal unfavorable comparisons with competitors), a fair amount of evidence shows that student grade-point averages have risen dramatically since the middle of the last century, while the time spent by students on academic pursuits has declined. Students are doing less for more.

Reading Rojstaczer and other evidence, it appears that the typical grade-point average on the four-point scale was about 2.50 or below in the mid-20th century (between a “C+” and a “B-”), rose sharply to around 2.80 by the mid-1980s, rose further to about 3.00 (a “B” average) around 2000, and went even higher, to about 3.20, by 2013. Assuming the trend has continued as the Harvard data suggest, it is probably at least 3.33 (“B+”) today.

Over the course of my academic lifetime, the typical grade has moved upwards nearly one whole grade level. If I had given more than, say, 20 percent of my freshman/sophomore Principles of Economics students “A” grades when I started teaching 60 years ago, I would probably have been ostracized by my colleagues for maintaining low standards.

Moreover, since the proportion of young adults going to college has also risen sharply, a larger proportion of college students in modern times have had only so-so high-school performance records than in, say, 1950. Very likely, on average, less-able students are getting these dramatically higher grades.

Students have reacted in a predictable rational fashion to these changes: by working less. Many skip class and read, write papers, and study far less—and, no doubt, rely on AI tools to shortcut real learning even more. There is evidence supporting this assertion, too. A 2011 study by Philip Babcock and Mindy Marks in the prestigious Review of Economics and Statistics suggested that the average weekly time spent on academic studies had fallen dramatically, from about 40 hours weekly in 1961 to roughly 31 hours weekly by 1988, and even further to 28 hours weekly by 2003. Student effort fell in lockstep with rising grades.

Students have reacted in a predictable rational fashion to these changes: by working less. My guess is that the study-time drop may have continued after 2003, augmented by schools allowing students to “attend” class by computer, often no doubt while simultaneously distracted by social-media apps unknown to earlier generations.

The early years of grade inflation in the middle of the 20th century occurred when huge enrollment expansion meant that some students couldn’t meet the old standards of performance. Also, increasingly, enrollees were considered revenue-producing customers rather than simply students. Keeping them content and enrolled became more important than their educational gains. 

The long-term consequences of reducing standards are becoming increasingly apparent. Another factor is that student evaluations of professors began to play a greater role in faculty promotion and tenure decisions. Giving higher grades improved one’s career advancement.

In recent years, concern over student mental health, along with a declining national emphasis on the virtues of hard work, has contributed to grade inflation, as have the realities of enrollment decline since 2010, enhancing desires to “keep the kids happy.”

The long-term consequences of reducing standards are becoming increasingly apparent: “Grade Inflation Produced Mamdani’s Proletariat” read a recent headline on a superb story by the Wall Street Journal’s Allysia Finley. She observes that college graduates who are increasingly unwilling to take decently paying jobs such as working in a low-level managerial position in a retail store are finding themselves unemployed—and they blame capitalism for their woes. The life of working one-third less time than their parents did while in college was tolerable, but the same is not true of working—horrors!—a 40-hour week like those parents do now. Thus, grade inflation has not only bad educational consequences but also economic and political ones.

How do you end grade inflation? Not easily or without issues.

Some might turn to the federal government. For the Department of Education to mandate, say, that the aggregate undergraduate GPA at schools accepting federal aid cannot exceed 2.80 would invite still more federal interference in collegiate life, which, on balance, has been a negative factor in higher education over the past half century. Trying to monitor such a rule would be costly and almost certainly useless.

Or the task could be entrusted to accreditors, but their record has not been much better. Their oversight has been risible.

Here’s a better idea. If we had a well-accepted undergraduate exit exam (a “College Learning Assessment Exam”), we could bar federal and/or state funding at schools with large proportions of students showing little sign of having learned much in college. Additionally, state governments could mandate some minimal-standards rule for public schools—no more than 20 percent of all grades can be “A’s,” for example. College-ranking organizations could have an academic-rigor component penalizing schools that give a disproportionate number of high grades.

To be sure, there is a socialization/networking dimension to college life. Academic performance is important but is not the sole factor in successfully transitioning one from an immature adolescent to a productive adult. That said, the premier rationale for going to college is to broaden one’s knowledge, wisdom, and virtue, and grade inflation has detracted greatly from that objective.

Richard K. Vedder is distinguished professor of economics emeritus at Ohio University, a senior fellow at both Unleash Prosperity and the Independent Institute, and the author of Let Colleges Fail: The Power of Creative Destruction in Higher Education.