Grade inflation: Yes, your kid’s grades are bullshit

Grade inflation might be the most corrosive form of inflation in America, not because it drives up costs directly (though it contributes to the bloated education bubble), but because it turns assessment into performance theater.

The Data Is Damning

At Harvard, 79% of grades are now A’s.

Pause on that.

Either Harvard has miraculously assembled a student body where 4 out of 5 performances are truly excellent—or the grading system has lost all credibility.

And this isn’t just Harvard.

Between 1983 and 2020, the average GPA in American colleges rose from 2.8 to 3.15, according to a study by Rojstaczer and Healy. At private schools, the number is even higher: 3.3. All this while time spent studying dropped, and literacy among college grads declined.

Are our students just getting smarter?

Or are we lying to them?

This isn’t just a Harvard problem.

Looking at nationwide data from 1983 to 2013, we see average GPAs climbing steadily across all types of post-secondary institutions. Private universities lead the pack, but public schools aren’t far behind.

The trend line points relentlessly upward.

Are our kids just getting smarter and smarter?

Incentives Are the Problem

Everyone in the system is acting rationally in response to incentives. And that’s exactly the problem.

• Professors depend on student evaluations for promotion—and higher grades get better reviews.
• Departments compete for enrollment. Tough-grading courses see students flee, so professors ease up.
• Universities chase rankings. Graduation and retention rates boost prestige, so failure becomes a liability.

The entire system rewards inflated grades—while punishing honest ones.

As one professor put it: “You don’t get tenure for failing too many students.”

And so we’ve made it harder to fail.

The Pass/Fail Experiment

Some schools have tried to break this cycle. Wesleyan University, for instance, implemented pass/fail grading for first-year students in 2014. The results are telling:

1. Students gamed the system, loading up on challenging STEM courses during their pass/fail semester to avoid GPA damage.
2. Faculty reported lower motivation, preparation, and attendance.
3. Actual performance (though not reported grades) dropped by 0.13 grade points.

The experiment revealed something crucial: when you remove grade incentives, students don’t suddenly become pure lovers of learning.

They optimize for other things.

The Mastery Mirage

Here’s where it gets really troubling.

The rise in grades hasn’t been matched by a rise in student preparation or effort.

In fact, the opposite is true. Students are studying less while getting better grades. Resources per student have declined. By every objective measure except grades, the trend lines point down.

This creates a dangerous illusion of competence.

Consider this shocking statistic from Illinois: there are 67 public schools where zero students demonstrate math proficiency. Yet these schools maintain graduation rates around 70%. One “top school” spending $54,000 per student graduates 81% of its students—with zero math proficiency.

The Consequences

The real cost of grade inflation isn’t monetary—it’s educational.

When an A no longer signals excellence, when a degree no longer guarantees competence, we’ve broken something fundamental in the feedback loop between effort and achievement.

This matters because grades aren’t supposed to be just arbitrary letters.

They’re supposed to be signals—to students about their progress, to educators about their effectiveness, to employers about graduates’ capabilities. When these signals get distorted, the whole system starts to malfunction.

Goodhart’s Law states that when a measure becomes a target, it ceases to be a good measure. We’ve turned grades into targets—for students, professors, departments, and institutions—and in doing so, we’ve stripped them of their value as measures.

(BTW, here’s an alternative to grades)

The Way Forward

Solving grade inflation won’t be easy because the incentives that created it are deeply embedded in our educational system. But recognizing the problem is the first step.

We need to:

1. Decouple faculty evaluation from student satisfaction
2. Create better metrics for educational quality than graduation rates
3. Restore meaning to grades by anchoring them to objective measures of competency

Most importantly, we need to remember what grades are for: to provide accurate feedback that guides improvement. When we inflate grades, we’re not being kind to students—we’re lying to them. And lies, even well-intentioned ones, eventually catch up with us.

The cost of grade inflation isn’t paid in dollars, but in diminished learning, false confidence, and the slow erosion of educational standards. It’s time we recognize it for what it is: not just another bureaucratic problem, but a crisis at the heart of American education.

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Note: I’d argue that grades overall are a subpar extrinsic motivator of young people, but given how ingrained they are to our education system, we do need them to be at least useful. At the Schools of Entrepreneuring, we will not have grades.

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