"They tell you they like you, you’d be a great fit, your code looks great, but then discontinue because they just noticed you don’t have a piece of paper."
It could be that they somehow didn't notice and then singularly rejected you for that reason. It's also possible that they were willing to overlook it but once they had the chance to evaluate you as a whole they decided that the total package wasn't enough and the degree was the reason given. To me the degree is more about proving that the candidate has true interest in the subject and has been able to commit to it over an extended period of time more than anything else. I am asking them for a big commitment over an extended period of time to join my company after all.