Among other things it's a form of validation/filtering. If you're hiring you want to filter down the applications to a measurable amount, and one of the best wa

Among other things it's a form of validation/filtering. If you're hiring you want to filter down the applications to a measurable amount, and one of the best ways to do this is by seeing if they've done something in the past which requires high ability. In CS this could be having gained entry to MIT or having worked at Google. In these cases you have an institute that you respect saying "we've evaluated this person previously and they've met our high standards". So regardless of the fact that went to MIT or worked at Google, the very fact they got in conveys valuable information to the future employer. I'm willing to bet that if you applied to hundred companies with two applications both otherwise identical but one having a MIT degree and one having a state college degree, the MIT degree application would get you far more interviews. Also there's the fact that schools are different. There are plenty of college which are essentially "java schools" which have very minimal coverage of CS beyond programming, which is significantly different from what you'd get at somewhere like MIT. The same applies to MBA schools, but even more, there's no standardised curriculum and the quality of the teachers varies far more, you could be taught by the person who invented in industry the business practices he teaches, or alternatively by a teacher with no real interest in the subject and no industry experience. There's a lot that can be learnt from books, but there's a huge amount of knowledge that can only be learnt from people with industry experience and that's a rare thing.