Knowledge is divine is what everybody infers from the above line from the Rig Veda. As Sanskrit is hardly studied in depth in the current timeline, inner meanings of several verses of wisdom are often lost. Likewise is the case with Prajnanam Brahma.
I studied in one of the Navodaya Vidyalayas, where this line happens to be in the logo of the government organisation that runs these schools. Sadly, I didn’t get to study Sanskrit there, but with one of my teachers’ explanations I could understand the inner meaning of Prajnanam Brahma. He said, “Suppose you are on the road travelling, and there happens to be an obstruction of some sort: a piece of rock put by some pranksters may be. If you have no knowledge (Jnana), then you would run your vehicle over it and hurt yourself. It is Ajnana (No knowledge). But if you have knowledge, you’d take a different route or bypass it, helping yourself for a safe journey. It is called Jnana. In case you get down and remove that obstruction from the road, so that nobody would be hurt including yourself, it is called Prajnana (Supreme knowledge). The goal of Navodaya Vidyalaya is to inculcate supreme knowledge in the students.” It was Shri G.R. Maskeri.
So Prajnanam Brahma not only means that knowledge is divine, it also invokes the philosophy of Advaita. God is someone who has Prajnana in every sphere of life. So, there is potential God in everyone (As rightly quoted by Amish Tripathi in his books). The word Brahmana that denotes a caste to a layman is also derived from the word Brahma (which means the absolute power). Valmiki who wrote Ramayana, was a Shudra by birth, but because of his Prajnana, he became a Brahman – one of the tallest of them in fact. Clearly, even the decision on one’s varna or caste was initially based on merit and not by birth (Another example is of Vishwamitra who was a Kshatriya by birth, became an Acharya – a post meant for a Brahman).
Let’s all strive for not just Jnana, but Prajnana, to be our better selves, everyday.
Have a great day!