Grade inflation impacts university credibility, student courses of study, choices of institution, and other areas. There has been an upward shift in grades without a corresponding upward shift in knowledge gained. Some of the most frequently mentioned causes of grade inflation are: Ø student evaluations of professors, Ø student teacher dynamics, Ø merit-based financial aid, and Ø student expectations. Ø Among the reasons for higher student grades on the part of professors are: Ø fear of student evaluations, Ø avoidance of bad relations with students, Ø below average teaching skills, Ø lack of experience, Ø a lack of clearly stated objectives, and Ø job security. While grades are not a perfect answer to assessing student performance in a course they are still the best answer we have for evaluating students. In order to evaluate students more accurately, universities must identify the problems in grading and grading practices. Once this is accomplished new practices can be designed and policies implemented.