This is a really interesting thread, and one that I've thought about a lot over the last few years while completing my BA.
When attending class, I usually dress somewhat professionally (still talking about undergrad). I've noticed so many people that just show up to class inn sweatpants, looking like they've just rolled out of bed; I want my professor to know that I take school seriously and I feel like that just can't be done when you are dressed so casually?
I would think that dressing somewhat professionally would be expected at the MA level as well. Blouses, dark jeans, looking put together, that sort of thing? Definitely business casual in my opinion.