This is a crock- the average college graduate today knows LESS than the average college-bound High School senior did a generation ago. The proliferation of external aids (like being able to GOOGLE anything, the use of graphing calculators, etc) covers up a lot of this ignorance. They may not actually KNOW much, but they can look it up when needed.
Yeah. An anecdote. I know a philosophy major who didn't know the difference between utilitarianism and Unitarianism.
Every generation says that about the younger generation. You're talking about memorization of facts versus application of knowledge. Our society has gotten a lot more complex, which means kids have to have a much wider breadth of knowledge. Simply knowing stuff isn't that useful anymore- applying it is.
College is much more competitive these days than it was 30 years ago. The fact that so many more kids go to college than used to means that, to stand out, you have to work a lot harder. I see what my cousing have to go through these days compared to what I had to go through just 10 years ago in college. I can buy the contention that SAT's are going up.