Complex sentence: It was clear that, far from just being a demonstration of academic knowledge, degrees were seen as a test of one's ability to exercise public office, and therefore it was only fitting that they should be brought under tight state control.
Split into simpler sentences: It was clear that academic degrees were seen as a test of one's ability to exercise public office, rather than just a demonstration of academic knowledge. Therefore it was only fitting that they should be brought under tight state control.