Grade inflation in modern universities across the United States has been documented since the 1960's and shows no signs of disappearing soon. Responses to this trend have ranged from mild worry to excessive panic. However, is the concern justified? How significant are the effects, if any, of grade inflation on students? Specifically, does grade inflation on the aggregate level have any effect on how much an individual will learn from their courses? This is precisely the question my project hoped to address. Grade inflation in U.S. colleges has played a central role in student-teacher relationships and the way university classrooms run. Through teacher interviews, student surveys, and a literature review, this paper investigates the nuanced effects grade inflation is having on student motivation and learning. The hypothesis is that the easier it is for a student to obtain their desired grade, the less they will end up engaging in and learning from a given course. Major findings of the literature include: grade inflation has robbed grades of their signaling power, grade inflation has helped create students are too grade-oriented, student evaluations of teaching have prompted higher grades, higher expectations for high grades induce greater study times, and open dialogue can help reverse grade inflation trends. The student surveys and faculty interviews agreed with much of the literature and found that professors believe grade inflation is real but do not believe its effects are significant, students admit to being primarily motivated by grades, and students find grades critically important to their future. The paper concludes that grade inflation is not as detrimental to student outcomes as ardent critics argue and offers practical ways to address it.