The validity of grades in higher education as a measure of what a student has actually learned has been a concern to both the public and academicians for over three decades. This was one of several issues discussed in a report by the National Institute of Education Study Group on Conditions of Excellence in American Higher Education. Furthermore, the problem has been complicated by grade inflation since the 1960s. As a result of this vagueness in the meaning of college grades, states have become more involved in college student assessment, especially through the use of standardized tests. It is recommended that: (1) colleges and universities continue to monitor grade inflation; (2) colleges consider changing from a five-point to a 13-point grading scale; (3) colleges consider the use of criterion-referenced grading rather than norm-referenced grading; (4) state agencies involve university and college faculty in studying and adopting changes; (5) standardized tests be developed at the state or local level, since the United States does not have a national curriculum; and (6) an instructional model be used to assess students before college entry, during the undergraduate program, and at graduation. (JGL)