Graduation

College is completed after passing the final exam for the second semester of the fourth year.

Completing University


Hopefully your Sim will graduate. Graduating is as simple as passing every semester, and perhaps you have a Sim that wants to do nothing more than the bare minimum to get by. Either way, once you finish your last final exam, you'll be told if you graduated with any honors, and you'll be given 72 hours to pack up and leave.

During that 72-hour period, you can throw a special party via any phone called a graduation party. Your Sim and anyone else you invite will be decked out in graduation caps and gowns, but the party itself will be normal. Once the party concludes, or if you wait out all three days, you'll be ejected from the campus. Those university presidents just don't know how to have fun.

There are less prestigious ways of leaving college, though. At any time you want, you can call the registrar and select to drop out. Also, if you fail any semester, you'll be placed on academic probation. This forces you to repeat the semester (effectively extending your Sim's life span by another three days), and if you fail again, you'll be expelled.

Once out of college, your Sim will immediately become an adult, and will be prevented from going to college again. Unlike real life, Sims only get one shot, so make sure it counts.

If your Sim graduated, he'll have a diploma in his aspiration rewards panel. This can be hung on any wall, and it can be read for the details of his graduations (such as honors, if he had any). Once on a wall, the Sim can "re-pack" it. Basically, it's removed from the game but placed back in the Sim's aspiration rewards panel. That way, a Sim can take it with him if he moves.

"Save the Sheep" Faux Sheepskin Diploma
Received by finishing University. It is a decorative object showing your achievements at university placed in your inventory automatically. Upon installation of the University Expansion, all Adult and Elder Sims automatically are given this, however they do not receive the benefits given to graduated Sims (Lock 2 wants, 6 Want slot, Unlockable careers, etc.).

"'This prestigious diploma bestowed by your Sim's University at graduation gives one more sheep another chance at life. Made of the finest faux sheepskin, this diploma tells the world that your Sim is educated, employable, and concerned about sheep conservation.'"

Honors

 * 1) Summa cum Laude - 4.0 GPA
 * 2) Magna cum Laude - 3.9 GPA
 * 3) Cum Laude - 3.7~3.8 GPA

Graduation Party
After the last exam your Sim is given another 72 hours to say goodbye and have a Graduation Party, complete with cap and gown. After the party, with the special event camera on, the graduated Sim will grab a close friend to take a picture with followed by the throwing of the caps in the air and the transition to an Adult. Without the special event camera, the Sim will just transition to an adult and go in the taxi cab back home.

Post-Graduation Jobs
Prior to the expansion pack, getting jobs from newspapers always put a Sim at level 1 of the career track. Getting a job from a computer, conversely, put a Sim at his appropriate level of the career track based on his job skills.

That still holds partly true, but college grads can now get very high and well-paying jobs through the newspaper. SimCity seems to favor any degree over no degree, so a graduate may even get a job at a high level in a career he's technically not suited for.

If you wondered what the point of college was, just look at the paychecks your Sim gets. You'll be earning several hundred per day pretty much from the beginning, which leads to speedy home expansion.

Disclaimer
Copied from Guides IGN:The Sims 2 University