They are bullshitting you. Big companies can have rigid salary structures, but at a startup you have lower pay because that's what you accepted. The degree argument is a negotiating tactic to get you to accept lower pay.

That said, if you don't get a degree you will likely be fighting this battle over and over for the rest of your working life. And college is a lot more fun when you're the same age as your classmates.

They likely feel that they are taking a bit of a risk to hire you. If your performance is as good or better than others, then you can expect that your pay will increase to match theirs over time. Longer-term it has to be about performance, not what degree you hold.