Earlier quoted context omitted.
But that's all an outgrowth of #1. They wouldn't be able to do it if people didn't need to go to college to get a job.
I read up on the court case, and the ruling was that you couldn’t require people to have (in this case) a high school diploma without it having a defensible relevancy to performing the job. I do not understand your argument.
But let's say you have a job position that doesn't require experience or a lot of education. You just want to hire someone who's smart, someone who learns quickly and can communicate in English. You put out a job req and get back 1000 resumes. Having no way to winnow the field, and realizing you can't interview them all, what you'd like to do is give everyone an IQ test, something that used to be very common, and maybe some kind of reading comprehension test.
But because of Griggs, you can't. If your test has a disparate impact on race or sex you're going to get sued. Not only that, your intent doesn't matter, even if the test is fair, you're still going to get sued. What you need is a proxy for intelligence. Some way the applicant can prove he/she is at least reasonably intelligent and can write a memo.
So... you change your job req to require a college degree.
That's why jobs that used to require only high school diplomas now require college degrees. Griggs created (or at least cemented) the practice of using a degree as a proxy for intelligence.
But wait, there's more! Now that college degrees are as common as dirt, you need some way to rank the people with college degrees. That's where #2 comes in. As an employer, you figure the smartest people are the ones who got into the the most competitive universities, and the most competitive universities are the ones that rejected the most students for each one they accepted.
So when you get a resume from an MIT (7.9% acceptance) grad and a resume from, say, an Arizona State (84% acceptance) grad, you figure the MIT grad is probably more intelligent. Might not actually be true, but that's the way to bet.
This is a positive feedback loop. MIT grads go right onto the lucrative Wunderkind track when they apply for jobs. Therefore more people apply MIT, making MIT's acceptance rate even lower. Rinse, lather, repeat.
That's why you can stroll into a $300k+ job after graduating from Harvard Business School (5.2% acceptance), but an identical graduate from Podunk U is starting at $45k. Even if Harvard teaches you nothing, the tuition is worth every penny. It would be worth 10x what they charge. Your employer doesn't care what you learned at Harvard. He cares that you were accepted to Harvard.
This is great for established universities, because it means they never have to face competition from new schools. You see, if you start a new university parents are not going to send their kids to your school, because they don't know what that all important ratio is. And because of that your acceptance rate will be very high, meaning you won't get a lot of applicants next year, either.
What it all boils down to is the competitive schools can charge whatever they want. And because Harvard is charging $60k, mid tier schools can get away with charging, say, $50k, even though they couldn't really justify it in an audit.
And ultimately, it's all because of Griggs.