You can ask the question the other way: Is it ethical for your employer to expect you to obtain the knowledge to solve a work-specific problem on your own time and without pay?
Worse, I paid a lot of money on my own time for my degree my employer expected
To play devils advocate:
If you have applied to do the job shouldn't you already have the knowledge? If you can't do a job you have got it dishonestly or their was a failing in the hiring process.
If the job has changed to incorporate something new (e.g. a new technology) that it did not when you were hired then learning during working hours should be acceptable.
Great point. Unfortunately, I could never ethically apply for any job thought if this was true. The employers hide far too much knowledge for me to say truthfully if I KNOW something.
For instance, I KNOW javascript. But do I really?
Sure, I can make websites more enhanced with form validation, do some html scraping, enhance the design, or even collect analytics. But that's not what they asked. They asked if I knew javascript.
I definitely don't know how to create a really great search tool for a pure front-end app. I've never created a video game in the language. I'm horrible at implementing graphics in it with canvas. So do I really know the knowledge for what they are asking me for?
Or, you met the broad requirements for the job, such as knowledge of specific languages, but haven't worked with the library or framework used by the company.
Also, reading is necessary when presented with new problems or when trying to identify a solution to the existing problems.