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There's basically three categories where this problem shows up: grade inflation, cheating, and discipline. Grade inflation is most relevant to colleges, discipline only matters for levels of schooling with mandatory attendance, and cheating cuts across all levels.

However, the same issue is in common: In theory, there are standards applied to students, and it is an important priority to distinguish between students who meet the standards and students who don't. In practice, the administration does not necessarily care about applying the standards rigorously.

I think the following two articles are a good introduction to grade inflation as a topic:

"Can Untenured Faculty Members Stop Grade Inflation?" - Chronicle of Higher Education, http://chronicle.com/article/Can-Untenured-Faculty-Members/4...

"In the Basement of the Ivory Tower" - The Atlantic Monthly, http://www.theatlantic.com/magazine/archive/2008/06/in-the-b...

It can also be useful to read up on business schools, because a business major is not an "academic" subject; more than any other major, the students are looking explicitly for a credential that boosts their income, and don't care about the subject material. The book "Ahead of the Curve" (http://www.amazon.com/Ahead-Curve-Harvard-Business-School/dp...) is a well-written appraisal of the Harvard B-School and includes chapters specifically on both grade inflation and cheating.

Going through these publications and/or following the notes and recommended reading therein can lead to more involved reading on the topic. Articles in the Atlantic Monthly are always a good starting point.

The fundamental issue: If an institution of learning punishes students for cheating, or failing classes, or behaving badly, then somebody, somewhere must have both the authority to do so and the goal of exercising said authority. But often, nobody wants to be that person, or the authority is conflicted, or the goal is given less priority than the goal of making money/quota.

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