Could this start a negative cycle where college degrees are devalued because of the quality of graduates, reducing the demand for degrees, leading to colleges lowering standards, causing lower quality graduates, leading to further degree devaluation?
I keep having to say this because people keep bringing this canard to HN: it it not in fact unlawful to use intelligence tests in hiring processes, some of the largest companies in the US do so for some roles (though, tellingly, not for elite roles), the companies that administer general cognitive tests (advertised as such!) have logo crawls on their front page of companies your mom would know, they have deep pockets and would make rich targets for contingency employment discrimination lawyers if this legal claim was true --- but it simply is not.
The reason more companies don't IQ test applicants is that it doesn't work. It's a revealed preference. People here would make fun of a tech company that relied on IQ tests to qualify employees. (Braintree apparently used to!)