What is literacy?

I think the basic definition of literacy is simply: communication through words. Is a person who can read the newspaper literate? Yes, because they can read. But it seems that literacy in college is not quite the same as what I believe in. The definition of literacy in college is completely different from the outside world. It requires us to know more than just being able to read and write. As a college student, literacy means being able to read ridiculously long article that some professor researched on for 10 years and being able to write a 50-page paper on whether or not the United States should drop the atomic bombs in Japan. Does it prepare us to communication clearly in the real world? Maybe? It trains us to think logically and trains us to expand our 2-sentence answer to a 15-page paper.