I understand what some of you are saying about the downgrading of the status of the BA but I don't quite agree with all of your conclusions. What I think has happened is a few things.
First, the % of people in society who get BAs has dramatically increased. That has of course all by itself downgraded the value of the BA on the very simple principle that a glut of anything inevitably downgrades the value of that thing.
Second, for a number of reasons, including the necessity to accommodate large numbers of people who didn't used to be there, standards at most colleges fell. The quality and difficulty of the curriculum and teaching declined and grading got easier. Again, simple math: the more people you admit, the more dumb and mediocre people you admit. And you can then maintain your standards and flunk a lot of people and give a lot of other people Cs, but this will be upsetting to your paying customers and might have some other unpleasant consequences. So the natural reaction was just to make it easier for all. There is a conspiracy on campus to deny this but employers and everyone else know it and they treat a debauched degree accordingly.
Third has been the collapse of standards for various reasons, mostly driven by leftist ideology and "PC" (cue up Fuuma and holymadness to get a Two Minute Hate started against me for daring to say that). "Scholarship" and "learning" have become incredibly frivolous and everyone knows that too.
So, yes, a BA is not what it used to be. But it is still important, especially from the elite schools. That's because it is now used in a new way. Elite employers use an elite degree as a proxy for two things that they are not allowed to test or ask about: IQ and class. IQ is obvious. It's illegal for employers to test your IQ but it's legal for colleges. Hence when Goldman hires Harvard grads what they are really hiring is smart kids. And since Harvard is the most selective undergraduate school in the country, Goldman assumes (with good reason) that by hiring Harvard grads they are hiring, on average, the smartest kids in the world for that year, or at least the smartest kids that they can easily identify. Harvard admissions stamps that seal on the kid's forehead. It's pretty reliable. Harvard and all its sister colleges have completely revamped their business model into becoming human capital markers for elite institutions. Goldman does not care what you learned at Harvard and takes if for granted that you learned virtually nothing. It just doesn't matter. However, they want Harvard grads infinitely more than they want graduates of Michigan State who learned, presumably, the same amount (close to nothing).
This said, parents won't pay well into the six figures simply to validate their kids' SAT scores. Which brings me to the second function that elite colleges serve. They are class markers now. An Ivy (or comparable) degree is like what membership in an aristocratic family was 100+ years ago. It means You Belong. Or at least that you have a chance to belong, provided you act the right way, mouth the right opinions, navigate the right institutions, work reasonably hard, etc. But it opens the door to all those institutions and it teaches you how to act and what to think (and, crucially, what to say). Goldman is not hiring you out of Harvard merely because you are smart but also because Harvard will presumably have done a decent job of turning you into a Goldman (/Davos/Ford Foundation/MoMA/KleinerPerkins, etc.) type person. I.e., "our kind." This way the elite gets to remain an elite and claim to be meritocratic at the same time. To see that this works, consider how other elite schools that are much more purely meritocratic but not part of the cultural game, are much less successful as feeders to the Davos infrastructure. MIT and CalTech just don't do it to the same degree. You might make it to a quant desk somewhere but it's not like Harvard where elite employers will hire the entire class every year if they could.
Finally, on grad school, yes, all things being equal between two candidates, a grad degree can be a net plus. That is a far different thing than saying that a grad degree opens doors in its own right or that the ROI is sound. Most employers will prefer a person with a BA (younger, cheaper, easier to mold), especially an elite BA, to someone with a grad degree. They do not use grad degrees to sort the smart from the non-smart. They already have other ways to do that which are more reliable. Also, work experience counts for more than that second degree. It's either a plus, because it shows that you are accomplished and have a track record, or negative, because it's an indicator that you will want too much money. A second degree is just a cherry on top that might nudge the scale over someone else whose credentials, age, experience and salary requirements are already close to yours.
I am not here talking about an MBA which in certain finance and business careers is basically required if you want to get past a certain level. And law school is of course a totally different matter as well.
Edited by Manton - 7/27/11 at 9:29am