Hyperinflation in America: The End of Grades?

Grade inflation—no, hyperinflation—is running rampant in American higher education.  At Yale, where I have been both a student and an instructor, the average GPA has risen considerably over the past 50 years. And my alma mater is not unique.

A recent study revealed that 42% of four-year college grades are A’s, and 77% are either A’s or B’s. According to Inside Higher Ed, “At four-year schools, awarding of A's has been going up five to six percentage points per decade and A's are now three times more common than they were in 1960.” At Yale, 62% of grades were in the A range in the spring of 2012. That figure was only 10% in 1963.

“A’s are now three times more common than they were in 1960.”

Back then, a C was the grade college students received most frequently. Later in the decade, the B took its place. Professors boosted students’ grades in part because, if the kids did too poorly, they could be shipped off to the war in Vietnam. The B reigned supreme till the 1990s, when the A claimed the crown. It's been strengthening its lead ever since. 

What caused the most recent bout of grade inflation? Some point to the rise in tuition—and educational debt—driving students to expect to be treated as consumers, or teachers boosting grades in exchange for better course reviews. Catherine Rampell of the Washington Post has suggested this dynamic has led to a “GPA arms race.” Others argue that student bodies have simply gotten smarter, but by a variety of metrics, this is not the case: standardized test scores and graduate literacy have not improved as grades have risen. 

Ironically, attempts to combat grade inflation don’t get a passing grade. In the early 2000s, Wellesley College implemented a policy setting a B+ or lower as the mean grade in many classes. As a result, the average GPA fell from 3.55 to 3.28 over a couple of years. Since then, it’s been slowly drifting back up.

Attempts to combat grade inflation don’t get a passing grade.

Princeton had a similar experience, as it too attempted to combat grade inflation in the early part of the 21st century. It urged departments to award A’s for no more than 35% of course grades. But by 2014, it ended its decade-old grade deflation policy, citing the unnecessary stress it created on students. The next year, grades rose back to their 2002 levels. 

Grade inflation is a classic collective action problem. Even if individual teachers want to fight back, they risk harming their students arbitrarily in the process. A single bad grade can set students apart when bad grades are hard to come by.

A recent op-ed by an Emory junior, who hopes to go to medical school, described the tears and desperation that came with receiving her first B+. She’s not alone. I've seen a similar dynamic at Yale with students applying to law school.

With hyperinflation, prices can spiral up indefinitely.  Unlike economic price levels, however, grades have an upper bound. For this reason, when they inflate, they all bunch into the A-range. Dispersion decreases, and grades are increasingly less useful at distinguishing between excellent and average student performance. The signaling value of an A is undermined if A’s are ubiquitous.

But is grade inflation really a problem? Critics say that without meaningful grading, students will have less motivation and knowledge of their strengths and weaknesses, while employers will struggle to differentiate between potential hires. Others, like my classmate Mark Oppenheimer, argue grade inflation is not a big deal. As he points out, some studies suggest grades are not effective motivators, and employers have already ditched grades as an important hiring criterion, without social collapse. Yale’s medical school, Mark notes, one of the top in the world, manages fine without grades. So does Hampshire College, a liberal arts school in Western Massachusetts.

Whether we want it or not, we’re effectively barreling towards a world without grades. Because of the collective action problem grading presents, only a top-down solution can handle the issue decisively and fairly.

Think back to how Fed chair Paul Volcker raised interest rates in the early 1980s to contain rampant inflation. It caused a recession—and thus great shared pain—but basically solved the problem. Likewise, students may have to accept the collective psychic shock of grade deflation in order to secure a robust grading system, if we want to preserve it at all.

Whether we want it or not, we’re effectively barreling towards a world without grades.

The epidemic of grade inflation provides a welcome opportunity to step back and reevaluate the role these marks play in the lives of students, recruiters, and educators alike. We may decide we want to revalue grades; we may decide to abolish them. Whatever the conclusion, thoughtful reflection on the role of academic feedback can only improve our educational institutions.

Vikram Mansharamani is a Lecturer at Yale University in the Program on Ethics, Politics, & Economics and the author of Boombustology: Spotting Financial Bubbles Before They Burst (Wiley, 2011). To learn more about him or to subscribe to his free mailing list, visit his website.  He can also be followed on Twitter @mansharamani or by liking his Facebook page.