While the average citizen today is better educated than the average citizen a generation ago, the average high school and college graduate is not as well educated as her peer of 25 or 35 years ago. In other words, more people are being educated but the standards are lower.
Certainly, college completion rates have significantly increased; in 1970 only 9% of those 25 & older held a bachelor's degree while nearly 29% do today. Additionally, between 1972 and 2002, the high school dropout rate in the U.S. decreased by 4 percentage points (however, the overall percentage of high school graduates in the population has remained steady at 70% because of immigration). So it's fair to say that more people are being educated. But is it true that they are being less well-educated? I'm not convinced that the picture is quite as uniformly gloomy as Dr. Stout paints.
My mom graduated high school in 1970 and I graduated in 1995. We had very similar SAT and GRE scores, and I think it would be pretty accurate to say that we have roughly equal intelligence. While my public high school offered multiple college-level Advanced Placement courses, hers did not even offer a single one. An increasing number of schools are now even offering so-called "post-AP" courses. Furthermore, as a girl, my mom was discouraged from enrolling in the "honors" science and math courses her school did offer. She never studied calculus until graduate school, even though she majored in economics.
The average SAT score of freshmen at top universities has increased significantly in recent decades. In 1952, the median verbal SAT score at Harvard was 583. By 1985, it had risen to 659. By 2004, the median verbal score (adjusted for the exam's recentering in 1995) was 738. In 1964, the median math SAT score was 695. By 2004, it was 760. Nearly 40% of those admitted to Ivy League schools last year were ranked either 1st or 2nd in their graduating class and 90% were in the top tenth. At DH's and my alma mater too, there has been a significant increase in selectivity. I'm not sure either of us would get in if we were applying this year even though we both had good SAT's and class ranks (he was valedictorian of his class and I was salutatorian & top female of mine).
What I think has happened over recent decades has been an increased stratification between economic "haves" and "have-nots" when it comes to education. For many upper-middle-class and affluent students, there are more opportunities for rigorous coursework, particularly for girls. Additionally, the greater competition for slots at top colleges has pushed them to higher levels of achievement. Unfortunately, too many low-to-moderate income students have been left behind. They are victims of the "soft bigotry of low expectations". Even if they complete allegedly "college prep" courses, often they wind up in need of remediation.
So what can we, as a society, do to fix this situation? I don't think throwing money at the problem will solve it. We need top-to-bottom reform of the entire system. While we can't get (and should not aspire to) equality of outcome, we need to ensure equality of opportunity so that each student can make the most of his/her God-given potential.