And the answer is ... E.
In this argument, the author makes a scope shift between the evidence and the conclusion: The evidence is based on "college graduates in Tycho city," while the conclusion refers to the supposed failings of "colleges in Tycho City." The assumption lies in the scope shift — in a connection between the colleges and the college graduates. The author assumes that the college graduates in Tycho City who can't write business letters attended colleges in Tycho City. Look for an answer choice that bolsters that assumption.
Choice (E) does exactly that, thus strengthening the argument.
Choice (A) does not strengthen the argument. While the argument concerns whether students are prepared for the business world, it is not relevant what the students are majoring in.
Choice (B) is outside the scope of this argument. What some other college is doing does not affect an argument about the effectiveness of Tycho City college programs.
Choice (C) actually weakens the argument. If most Tycho City college graduates leave the Tycho City area after graduation, then it is unlikely that a study of graduates in Tycho City is representative of graduates of Tycho City colleges. Be careful of answers like this in Strengthen/Weaken questions, which actually do the opposite of what the question asked.
Choice (D) is irrelevant. We don't care where the students live.
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