What are the purpose and importance of school graduation?

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A graduation ceremony is a cultural tradition termed as a rite of passage. It is a ritual or ceremony that marks one stage of a person's life to another. "Rite of passage" was termed by anthropologist Arnold van Gennep in 1909 who believed that passage rituals had 3 steps:
(1) Separation from Society
(2) Inculcation-transformation;
(3) Return to Society in the new status.

The baccalaureate (educational qualification) ceremony is considered the highlight of the school year. It is especially a time to formally recognize the achievements of students who are in honor societies and who have earned academic excellence. In other words, it's for those who truly studied, did not cheat or steal ideas off others and truly were honest and who did not settle for "status quo" grades but worked to be the best of what they could be. The commencement is when the graduates are handed their diplomas and walk across the stage and flip the tassels on their hats upon receiving their degrees and handshake.

Legend states the Baccalaureate ceremony originated back to a statute dated 1432 at Oxford University, that required each bachelor to deliver a sermon in Latin as part of his academic exercise. Because the earliest universities in this country were founded primarily to educated ministers, the British practice of a Baccalaureate service continued. Today, the service is usually an interfaith one that celebrates the completion of an undergraduate academic career

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