Originally brought to my attention via Pharyngula, I thought this study from the AEI was worth reposting. I work in academia and will be looking at this issue in my own university through the channels available to me.
Takeaway summary: While grade inflation is a slowly-growing problem at American universities, there is a severe concentration of the problem in education departments -- the very departments that train future teachers. Allowing these students to graduate with lax standards and decreased effort produces ill-prepared teachers that reduce the quality of the hiring pool for grade schools. The problem is clear and significant enough to call for focused action from education department faculty and administrators, as well as the university administrators that oversee education departments and the schools that depend on them for their classroom employees.
Money graphic:
That's not a problem specific to this university, or to Missouri, or a reflection of student preparation (education majors average lower scores than other students on entrance exams at most universities -- a problem itself, but a separate issue for now).
Teachers who graduated through lax standards are going to tend to employ those standards themselves. This is a problem that we must begin taking steps to rectify immediately. Higher standards in teacher training, including the requirement to show mastery of a curricular area equal to that of someone in the university's general population at least minoring in that field, are one of the most important determinants of teacher quality.
If you're working at a university, and especially if you work in or with the education department, see if similar data is available for the grade distribution at your school. Pay first attention to the grading and standards in your own department, of course! But to the extent to which you're expected to play a role in evaluating and responding to your colleagues at the university, you may want to grab this study. It suggests that the problem of grade inflation bears particular scrutiny in the very department that will be training future teachers.
Note: my overall opinion of the American teacher corps, as someone who went through 20-odd years of public school from 1st grade through the Ph.D., is that teachers are hardworking, underpaid troopers who deserve the best training and skills we can impart, just like every other service professional our societies need. I hope comments are constructive and focused. Thanks.