I would add a few considerations (related to Italy), however.
1) there has been a multiplication of faculties/courses, some of which are almost if not entirely "fluff" (when compared to the "classic" universities/courses).
2) the "initial" bar for entering the job market has been progressively raised (on essentially meaningless metrics such as the UNI career/grades), once (think of the 70's and 80's) there was a lot more jobs and very little amount of graduates, so having a degree was almost the same as having the possibility of a job guaranteed, now that there are so many graduates and so little jobs, having a degree is the very basic requirement[1], the degree grading starts to matter.
3) Additionally to the above, since the graduated cannot easily (or quickly enough) find a proper job, they continue studying and stages and masters are added to the curriculum, and age for a first job increases.
4) It is of course not the fault of the students, often good willing and what not but increasingly we have not-so-young people with a (largely unneeded) theorical knowledge that enter the job market too late and either with too many expectations (because they actually studied hard and for years) or with too little ones (because they "survived" on gig works or were underpaid for years).
About the level of education, there are however some serious problems IMHO (I perfectly know that I sound like an old grumpy bastard, but actually I am an old, grumpy bastard).
In my times there were simple "rules":
1) at the end of elementary school you should be able to make no grammar/spelling error when writing
2) at the end of middle school you should be able to additionally make no grammar/logic error when writing
3) you had all five years in high school to refine on the above two key points
4) when (if) you went to the university grammar, logical construction and more generally properly speaking, reading, understanding and writing in Italian were not a problem anymore.
Nowadays it is not so uncommon that people graduated from the university have difficulties in writing without some spelling errors (particularly accents and apostrophes), and in talking with verb conjugations and pronoums.
[1] There is also an economical - reversed - incentive. There is in practice very little cost difference for a firm between hiring a graduate from university and someone coming from a high school, even technical ones, so, for roughly the same cost (think of a difference for the firm Euro 100-200 more per month) the firm has all the interest in hiring someone which at least on paper has more knowledge and at least in theory is more mature.