At universities across the English-speaking world, grades have been going up. At US colleges, As (A+, A or A-) are now the most common grade. The proportion of first-class degrees at English universities quadrupled in a quarter of a century.  And a recent study at the University of Sydney found that the percentage of high distinctions awarded there had more than tripled in a decade.

Grade rises like this are not necessarily a problem if they reflect genuine improvements in student performance. But researchers who have looked into the question have generally found that a good proportion of the rise in grades is ‘unexplained.’ That unexplained component of grade rises is generally referred to as ‘grade inflation.’

Grade inflation, like monetary inflation, has costs. Bright, hard-working students don’t get the credit they deserve, as their strings of As no longer stand out. Less talented students have less motivation to work hard, since they’re likely to get a good grade (or at least a pass) whatever they do. And students may be misled into thinking they are better at certain subjects than they actually are.

Is grade inflation a problem at our universities? Our recent report for the New Zealand Initiative, Amazing Grades, suggests that it is. The proportion of A grades rose by 13 percentage points on average, from 22% to 35%, between 2006 and 2024. There was a particularly dramatic spike during COVID, when almost half (49%) of the grades awarded at the University of Auckland were in the A range. Pass rates also went up, to more than 90% at most of our universities, and to more than 95% at two of them (Lincoln and Massey).

But could these grade rises be explained by improvements in student performance? We looked at four reasons that university students might have gotten better over the past couple decades, but none of them explained the grade rises we observed.

Are universities just getting better students from our secondary schools? Not if the decline in excellence results in NCEA external assessments (which are strictly moderated) is anything to go by.

Are the grade rises at university explained by more female students, who tend to get better grades? Probably not, as female participation has flatlined over the past decade.

What about more funding? Funding per student did rise for a while, but then decline even as grades were reaching record highs. As for students having more support these days (an idea defended by Universities New Zealand CEO Chris Whelan), the number of academic and other staff per student has not changed much in the past ten years.

It's possible, of course, that someone will suggest some other factor that can account for the dramatic grade rises we document in our report. Until that happens, though, it looks like we might well have a problem not just with grade rises, but with unjustified grade inflation.

Why does grade inflation happen? In a word, incentives. Student numbers largely determine funding. Academics know this. A reputation for harsh marking can drive students away, so the safest course of action is to grade generously.

If we’re right about this, one obvious way of mitigating grade inflation would be to reduce the role that student numbers play in allocating funding to academic programmes. Other approaches are also available. We could have external cross-marking of undergraduate exams, a practice which is common in the UK.

Or we could implement grading systems which take into account how difficult different classes are. That would mean students getting less credit for easy As. And that, in turn, should make them less likely to chase those easy As in their choice of classes. It should also make academics less liable to hand out easy As as a means of attracting students.

In the end, grade inflation is a tough nut to crack. It has to be tackled at the national level, since any university that starts to grade more harshly risks a disastrous fall in those all-important student numbers. In the UK and US, which have hundreds and thousands of universities respectively, that makes deflating grade inflation a very big ask.

In this country, with its eight public universities, tackling grade inflation is more of a possibility. If, that is, we can muster the political will to implement reforms at the national level.

To read the article on the NZ Herald website, click here.