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The decline in mathematical capacities of undergraduates began with the introduction of the NCTM Standards in 1989.

The NCTM Standards were written in response to a nationwide
concern about mathematics education. Many articles written in the 80's and
earlier reported exactly the kind of gaps in algebraic abilities that are of
current concern. In addition, such declines had
been observed by UW faculty members well before 1990. For instance, Prof.
Emeritus Bob Phelps recently wrote:

"Perhaps the discussion of discovery vs. rote in the teaching of mathematics is
beside the point. Here is my personal observation, as a UW Math Professor
Emeritus who retired in 1996. I started teaching at the UW in 1962, at all
levels from freshman calculus to graduate courses. From time to time, I would be
assigned to teach an undergraduate course that I had taught many years earlier.
When it came time to give a midterm exam, I naturally dug out ones I had used
before but, much to my disappointment, the students performed far worse than
those who had taken it five to ten years previously. I observed this trend of
declining math skills over many years. To avoid flunking large numbers of
students, I felt forced to make the exams easier. The point: This was occurring
long before the discovery method was making any headway. Could there be an
additional factor causing what many of us have observed? TV? Fewer well-trained
teachers?"