Entrenched companies use this to their advantage and have their own recruitment pipelines.
This may be fake, but as somebody who went to a school that took academic rigor very seriously, I'm confident that my degree is the most valuable thing I own. Recruiters from both startups and entrenched companies are constantly reinforcing that belief.
The market for degrees may be pretty skewed, but that doesn't mean it's not a real market with supply/demand dynamics
Schools with slipping standards may not see negative effects in the short term, but people are waking up to the fact that a lot of degrees are nowhere near worth the tuition, and the first schools to go bust will tend to be the ones with the worst cost/benefit ratio.