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sheepskin (n.)

c. 1200, "the skin of a sheep," from sheep + skin (n.). Meaning "diploma" dates from 1804; so called because formerly made of sheepskin parchment.

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Definitions of sheepskin from WordNet

sheepskin (n.)
tanned skin of a sheep with the fleece left on; used for clothing;
Synonyms: fleece
sheepskin (n.)
skin of a sheep or goat prepared for writing on;
Synonyms: parchment / lambskin
sheepskin (n.)
a document certifying the successful completion of a course of study;
Synonyms: diploma
From wordnet.princeton.edu