Origin. Dates back to the 1860's when Pro-South Baptist Indianans moved to St. Louis County and fought Abolitionist German Catholics in a number of battles during the Civil War. Most of the City was Pro-Union and refered to Southern sympathizing County residents as Hoosiers.
Non St. Louis examples are found in the David Mamet penned remake of "We're no Angels" starring Sean Penn and Robt. DeNiro. Penn's Character says... "I look like a Hoosier or something." Also in Joseph Pistones Autobiographical "Donnie Brasco," Sonny Black uses Hoosier as an epithet.
For example if I were an eighth grade graduate then I would think that all those who dropped out in seventh grade were Hoosiers. If I wore a mullet all those with rat tails would be Hoosiers.
Also used in the common quip... "Hoosier daddy," as a joke on someones questionable paternity.
I have a masters degree and live in Portland, OR. To me those folks who live in West County, Clayton, U-City and Ladue that only have Bachelors degrees are Hoosiers