My field was engineering and my experience has been that many graduates in the last 20 years or so are limited in their problem solving ability. As you say they can plug numbers in equations and do the math but don’t typically understand why the equations work. I think that’s at least in part due to the reliance on sophisticated computer programs these days. It was a different world when we only had slide rules.
I'm not so old to have used a slide rule, and we did have programmable calculators, SPICE, Matlab, etc. The available tools now aren't that much different, only their speed and capacity have increased. We still work with SPICE and Matlab, and of course still use our programmable calculators. I really do think the schools think it sufficient to expose students to the background, with only a rudimentary introduction, then moving on to the "interesting stuff."
I remember filling up sheets and sheets doing Fourier expansions, solving boundary differential equations for electric fields, solving wave-guide problems using a Smith chart, and solving huge sets of linear equations for transistor small signal models of op-amps. And that was in undergraduate. We can't even get graduate students even write the basic differential equation for a RLC circuit, draw the small signal model of a BJT or CMOS transistor, or even describe what the "time constant" of a filter is. But give them the standard parallel or series RLC, and they can regurgitate the equation, can tell you the voltage drop across a PN junction, and maybe even tell you what the characteristic equations of the large signal model of a transistor. But apply any of that information? Nope. And none of that needs computer aided solvers.
But that being said, I never noticed a difference in problem solving ability based on what school someone went to. There were good ones and bad ones from everywhere.
This is different from basic theoretical knowledge. Those basic questions were to see what they learned. In interviews, if they didn't know what the small signal model of a CMOS transistor was, we walked them through it, then we can throw them the real problems. From there, we could identify problem solving skills. I think of it rather like trying to hire an accountant (and I'm not one!, so I'm sure I'll butcher this) who has heard of the different types of basis, and maybe could tell you what they are called, but couldn't work through an example problem.
We had a lot of OSU grads apply since our president/founder went there and he was friends with the dean at the time. And being in Idaho, we had WSU, UofI, BSU, and a smattering of UW applicants. Most were people trying to return near to home. And the difference was obvious, at least in terms of basic knowledge.
I'll give one story that I think shined well on WSU when I was an undergraduate. I was taking EE476, the Analog Integrated Circuits class (i.e. designing self-contained analog computer chips, such as op-amps, comparators, etc). It was hands down the hardest course I've ever taken in my career, including graduate school. It was taught by a tough, demanding, and thoroughly unlikeable lady named Dr
Terri Fiez (now at Colorado, but she left for OSU when I was in graduate school, and there appears to have been some drama there, which no doubt was attributed to her personality). I knew both bipolar and CMOS transistors backward and forward before even making it halfway through the class. I think I managed to eke an A- out of the class, but it was damn hard work.
That November (I think the fall of '95), I was flown down to Santa Clara to interview for a 6-moth co-op job at Intel. I was given the typical gauntlet of questions related to transistors (I'd be working at that level), and they were absolutely flabbergasted I could answer all their questions. I knew how to calculate the output impedance of just about any circuit they threw at me, I knew how to calculate rise and fall times of outputs, I knew how to determine current flow and drive capability. They then moved to to much harder stuff I've never heard of, but I could work through some of it. After the interview, as I went out for coffee with the hiring manager just before heading back to the airport, he asked me how I knew so much for being an undergraduate. I gave kudos to EE476 and WSU, saying it was that class alone--an analog class no less--that prepared me so well. He was very impressed.
When I wrapped up my co-op, he told me to send as many of my friends that took that class to him, and he'd every every single one of them. He was extremely impressed with WSU, and with what I had done during the co-op, and I have WSU (and Dr Fiez) to thank for that.