More and more college students are getting good grades, and more and more college students are passing the graduation finish line, diploma in hand. These trends cannot be explained by improved school resources or student characteristics like time spent studying, employment during college, or better college prep courses.
GPAs have been rising and college graduation rates have increased because standards have been lowered.
“Relaxed standards account for much of the increase in college graduation rates across institution types, including public and private universities and elite and non-elite schools,” says Kevin Mumford, associate professor of economics at Purdue University’s Krannert School of Management and director of the Purdue University Research Center in Economics.
His research paper, “Why Have College Completion Rates Increased?,” published in the American Economic Journal: Applied Economics, is coauthored by researchers from Brigham Young University, the United States Military Academy, and Stanford University.
They show that from 1990 to 2010, college completion rates have increased – for both men and women – and that grade inflation accounts for 95 percent of the increase in graduation rates.
The data used for this study comes from two large, nationally-representative student surveys from 1988 (NELS) and 2002 (ELS). The study also incorporates student-level data from 1990 to 2014 obtained from several universities. Unfortunately, nationally-representative student data for more recent years was not available.
The researchers examine potential explanations for the increase in graduation rates.
“In the end, the data tells us that the lowering of standards for receiving a degree most likely explains increasing graduation rates,” Mumford says.
There are possible incentives for faculty and administration to inflate grades or increase GPAs for reasons other than student performance. Instructors who give students higher grades get better teaching evaluations. Departments that increase grades see higher student enrollment.
College completion rates declined from the 1970s to the 1990s and while they have been rising since the 1990s, the six-year graduation rate at four-year schools was only 67 percent in 2016. This “college completion crisis” inspired scrutiny, and some institutions may have responded by taking action to increase graduation rates.
“Changing standards for degree receipt is a low-cost way to increase graduation rates,” Mumford says. And while grades have risen at all school types, the increase in graduation rates is concentrated at public schools, where more of their funding is tied to degree completion.
Lowering academic standards likely caused some harm, Mumford says. But, college-educated workers are in demand and the college wage premium is large. Higher graduation rates mean more workers with a college degree – even if lower academic standards mean that these grads have less skill on average than prior cohorts.
"More research must be done to identify the causes of grade inflation as well as its effect on learning and the skills of college-educated workers," Mumford says.