[gumpzilla]

I think this is pretty true. At prestigious undergraduate institutions, getting in really is most of the battle. Failing students seems likely to reduce the all-important 4-year graduation rates, lowering a valuable U.S. News and World Report metric; students with mediocre GPA's will impact job placement numbers poorly. The college's brand power must be protected, thus grade inflation. As an undergraduate, my advisor once told me that he needed to submit paperwork to some central organization if he wanted to give a student a grade worse than C-, which was the minimum passing grade. While this isn't the real issue, so much - out and out failure is less the problem than the disappearance of C's, when it comes to grade inflation - I think the disincentive to fail students is representative of a lot of those issues.