Indonesia has made notable progress in raising attainment levels in primary and secondary school. More than 1 million additional students graduated high school in 2012 when compared with 1999, and graduation rates are expected to increase further. Major efforts are being made throughout the system to improve learning outcomes and ensure graduates have more knowledge and better skills. This progress at primary and secondary school creates more demand for tertiary education (TE). Most students (88 percent in a recent survey) profess a desire to continue studying after high school. Indonesia's TE system, however, is not well prepared to help create relevant, high-quality opportunities for this growing pool of high school graduates. Wages for those with TE are high and have remained so even as more and more workers enter the labor market with at least some TE. TE is a good investment in Indonesia, even when one attends a TE institution (TEI) of perceived low quality. Empirical analyses of labor markets do not support the anecdotes about large numbers of unemployed and underpaid workers with TE. This fact is a main general conclusion that should shape the direction of TE policy in Indonesia.