Is Med School Pass/Fail? How Grading Actually Works

Most U.S. medical schools now use pass/fail grading for the preclinical years, the classroom-heavy first two years before students rotate through hospitals. A national survey found that roughly 56% of allopathic medical schools had adopted pass/fail for their entire preclinical curriculum, and that share has continued climbing since. But the answer gets complicated fast, because “med school grading” is not one system. Preclinical courses, clinical rotations, board exams, Dean’s letters, and honor societies each operate by different rules, and those rules have been shifting rapidly over the past few years.

How the Preclinical Years Are Graded

The first two years of medical school are mostly lectures, labs, and exams covering the basic sciences. For decades, schools graded these courses the way undergrad programs do, with letter grades or tiered systems like Honors/High Pass/Pass/Fail. That started changing in the 2000s, and by 2018 a study of 142 U.S. allopathic schools found that about 56% used pass/fail for the entire preclinical curriculum.¹ Schools that haven’t fully adopted pass/fail sometimes use a three-tier system (Honors/Pass/Fail) or assign internal grades that get reported to residency programs only as pass/fail on official transcripts. The trend is clearly toward less granularity, but a meaningful minority of schools still grade preclinical work on a scale.

Why So Many Schools Switched

The push toward pass/fail was driven largely by research on student well-being. A study comparing second-year students at two schools found that those graded pass/fail reported less perceived stress and greater group cohesion than peers at a school using a five-tier grading scale.² A larger multi-school study found the association was even starker: students at schools with three or more grading categories were roughly twice as likely to experience burnout and twice as likely to have seriously considered dropping out, compared to students at pass/fail schools.³

When one medical school switched its own preclinical grading from letter grades to pass/fail and tracked the results, students in the pass/fail era showed significant increases in well-being and satisfaction with both their education and their personal lives across the first three semesters. The kicker: performance on courses, clerkships, board exams, and residency placement didn’t decline at all.⁴ That combination, better mental health with no measurable academic cost, made a compelling argument that administrators found hard to ignore.

Does Pass/Fail Hurt Board Scores?

This is the question that made medical schools hesitate for years: if you remove the competitive grading incentive, won’t students coast and score lower on the boards? The evidence consistently says no, at least not on the exam that matters. When UC San Diego switched from Honors/Pass/Fail to straight Pass/Fail, students did score slightly lower on their internal preclinical exams. But their USMLE Step 1 scores, the national standardized board exam, were unchanged.⁵ The same pattern showed up at the school-level study cited earlier and in broader reviews of the literature: pass/fail grading doesn’t appear to drag down the standardized metrics that residency programs actually look at.⁶

One explanation is that students in pass/fail programs still study hard for board exams, because they know the boards carry enormous weight in their residency applications. The grading system for internal courses and the motivation to perform on a high-stakes national exam turn out to be somewhat independent forces.

Clinical Rotations Are a Different Story

The third and fourth years of medical school look nothing like the first two. Students rotate through hospital clerkships in surgery, internal medicine, pediatrics, obstetrics/gynecology, psychiatry, and other specialties, and here grading gets much more subjective. Most clerkships use a tiered system. A student’s final clerkship grade typically combines scores from a standardized “shelf” exam (a national subject test), evaluations from attending physicians and residents, and sometimes other components like oral presentations or write-ups.

Many clerkships use the shelf exam score as a threshold for honors: if you don’t hit a certain score on the standardized test, you’re ineligible for Honors regardless of your clinical performance. Researchers have pointed out that this approach is logically inconsistent, because the same programs use a compensatory model for everything else (strong clinical performance can offset weaker exam performance, and vice versa) but switch to a rigid cutoff specifically for the top grade.⁷ The result is a system where the Honors grade functions differently from every other grade in the same clerkship.

Racial and Gender Bias in Clerkship Grades

The subjective components of clerkship grading have come under intense scrutiny because of mounting evidence of demographic disparities. A review examining data from over 100,000 students across more than 100 schools found that racial minority students consistently received fewer Honors grades in core clerkships than white students. The same review found significant disparities in the language used in written evaluations based on race and ethnicity.⁸

A study at a single institution found both race and gender effects. Women received higher grades on average across all eight clerkships, and white students received higher grades than students of other races on four of the eight. These patterns held even after accounting for prior academic performance, which suggests the differences aren’t explained by incoming ability.⁹ The researchers concluded that tiered grading systems may be systematically susceptible to demographic biases, an argument that has added fuel to the push for pass/fail in clinical years as well.

The USMLE Step 1 Shift to Pass/Fail

Perhaps the most seismic change in medical school grading happened not at the schools themselves but at the testing organizations. In January 2022, the USMLE Step 1 exam, which had been scored on a three-digit scale and served for decades as a primary sorting tool for residency applications, switched to pass/fail reporting. The rationale was similar to what schools had been arguing internally: the numerical score was driving unhealthy study behavior, contributing to burnout, and wasn’t as predictive of clinical performance as its outsized role in the match would suggest.

The shift reduced some stress, but not uniformly. One study found that students taking Step 1 under the new pass/fail system had significantly lower Step 1-specific stress during their second year leading up to the exam. But that stress reduction disappeared once dedicated study time began right before the test, when the pressure of a high-stakes pass/fail exam reasserted itself.¹⁰ And the change created a new anxiety: roughly three-quarters of medical students reported increased worry about Step 2 CK scores, since that exam now carries a numerical score and has become the default academic differentiator. Students aiming for competitive specialties were especially anxious.¹¹

Students have also reported wanting more structured preparation support for Step 1 in the pass/fail era, including peer mentoring and additional practice exams, suggesting the test still looms large in students’ minds even without a numerical score on the line.¹²

How Residency Programs Sort Applicants Now

With Step 1 no longer providing a number, residency programs have had to adjust how they screen thousands of applications. A study modeling the effect on general surgery applications found that removing Step 1 scores compressed the distribution of applicant scores and reshuffled who fell where in the rankings. About 40% of applicants dropped in relative rank, 35% stayed the same, and 24% moved up. Among the top third, nearly one in five dropped to the middle, while about one in eight from the bottom third jumped up.¹³ The takeaway is that removing Step 1 didn’t just shuffle names at the margins; it genuinely changed who looks like a strong applicant on paper.

A survey of pathology program directors found that about 62% agreed that medical school ranking would become more important in the absence of Step 1 scores. Interestingly, program directors didn’t collectively believe Step 2 CK would become more important, which diverges from what students are feeling on the other side.¹⁴ That disconnect matters: students are pouring anxiety into Step 2 prep while program directors may be looking elsewhere.

Older surveys of program directors showed a strong preference for graded transcripts. A survey of general surgery directors from the early 1990s found that 89% preferred to review transcripts with grades rather than pass/fail marks, and 81% believed pass/fail put students at a disadvantage for competitive positions.¹⁵ However, a more recent meta-analysis found that once students actually enter residency, program directors perceive no difference in overall performance, learning ability, or work habits between graduates of pass/fail and tiered-grading schools.¹⁶ The gap between what program directors say they want in an application and what they actually observe in residents once they arrive is worth noting.

Class Rank and the Dean’s Letter

Even at schools that use pass/fail for coursework, students are often ranked in ways that aren’t immediately visible on a transcript. The Medical Student Performance Evaluation (MSPE), commonly called the Dean’s letter, is a narrative document sent to residency programs alongside the application. Many schools use the MSPE to sort students into performance categories, and the language can function as a de facto ranking system.

A study of schools that ranked students found that about 62% placed students into named category groups, but the number and size of groups varied wildly. The most common labels for the top through bottom tiers were “outstanding,” “excellent,” “very good,” and “good,” but each of those words was used by different schools to describe entirely different percentile ranges.¹⁷ A student described as “outstanding” at one school might be in the top 10%; at another school, that same word applies to the top 30%. Meanwhile, a separate analysis found that 73% of schools ranked students, using a total of 32 different adjectives across the system.¹⁸

Even schools that technically don’t rank students sometimes include language in their MSPEs that implies relative position, so the distinction between “ranked” and “unranked” schools can be blurry. The result is a patchwork system where two students with similar abilities at different schools might be described in very different terms, and program directors are left trying to calibrate across schools with no common scale.

Elite Schools Play by Different Rules

Here’s a wrinkle that rarely comes up in the pass/fail debate: top-ranked medical schools are more likely to withhold comparative performance data on their students. A study found that none of the top 10 U.S. medical schools reported comparative summative assessments, compared to about 56% of schools ranked 11th through 50th and about 80% of schools ranked 51st and below.¹⁹ In other words, the schools that could most easily differentiate their students on paper are the least likely to do so, presumably because the school’s name alone carries weight in the residency match.

Data on competitive-specialty match rates bear this out. Students at high-tier schools matched into competitive specialties like dermatology, neurosurgery, and otolaryngology at significantly higher rates than students at lower-ranked schools. Overall, about 12.5% of students at top-ranked schools placed into one of five tracked competitive specialties, compared to about 8.4% at lower-ranked schools.²⁰ Some of that advantage disappeared when the researchers excluded schools with affiliated residency programs in those specialties, suggesting “home program” connections explain part but not all of the gap. The broader point is that in a world with fewer numerical differentiators, institutional prestige fills the vacuum.

Honor Societies and Who Gets In

Alpha Omega Alpha (AOA), the medical school honor society, has long served as a credential on residency applications, a binary signal that says “this student was in the top tier at their school.” But research has repeatedly shown that AOA membership is not distributed evenly across demographic groups, even after adjusting for academic metrics.

An early study found that Black students were far less likely to be AOA members than white students even after controlling for Step 1 scores, research productivity, community service, and leadership activities. Asian students were also significantly less likely to be inducted.²¹ A larger study using national data confirmed and expanded these findings: after adjusting for MCAT scores and clustering by school, Black, Asian, Hispanic, American Indian or Alaska Native, and multiracial students were all significantly less likely than white students to be AOA members. The study also found that students from lower-income backgrounds and LGB students had lower odds of membership. Students with multiple marginalized identities had the lowest odds; only about 5.6% of students with four marginalized identities were AOA members, compared to nearly 24% of students with none.²²

More recent work has examined disparities within the Asian American category specifically, finding that 10 of 11 Asian American subgroups were less likely to be AOA members than white students after full adjustment. The disparities were particularly pronounced for Bangladeshi, Taiwanese, and Korean students.²³ These findings have fueled calls for reform or abolition of AOA, particularly in the context of residency selection, where the honor has traditionally served as a shorthand for academic excellence that the data suggest is filtered through demographic lenses.

What About International Medical Graduates?

The Step 1 pass/fail transition has particular stakes for international medical graduates (IMGs), who historically relied on strong Step 1 scores to compete for U.S. residency positions. For an IMG without the benefit of a recognized U.S. school name or a network of clinical contacts, a high three-digit Step 1 score was one of the few objective signals available. With that score gone, IMGs face a residency selection process that may lean more heavily on factors like school reputation, clinical experience at U.S. institutions, and research output — areas where they may be at a structural disadvantage compared to U.S. graduates.²⁴ Step 2 CK, which is still scored numerically, has become the primary standardized metric IMGs can use to stand out, which partly explains why anxiety around that exam is so high among both domestic and international students.

The Emerging Competency-Based Framework

While the pass/fail versus graded debate dominates most conversations, a parallel shift is happening underneath: the move toward competency-based medical education. Rather than grading students on how they perform relative to peers, competency-based approaches assess whether students can actually do specific clinical tasks at the level expected for their training stage. The currency here is the “entrustable professional activity,” or EPA, a defined clinical task that a supervisor judges the student capable of performing with varying levels of independence.²⁵

In theory, this framework shifts the question from “how does this student compare to classmates?” to “can this student safely perform this task?” That’s a fundamentally different grading philosophy, and it sidesteps some of the problems with both pass/fail and tiered grading. In practice, competency-based assessment is still being rolled out unevenly across schools and programs, and the tools for measuring entrustment reliably are still maturing. It’s worth watching because it could eventually change the meaning of “grading” in medical education more radically than the pass/fail switch did.

When Students Struggle

One aspect of medical school grading that doesn’t get much public attention is what happens when students fail. Remediation, the process of identifying struggling students and helping them meet the standard, is a routine part of medical education. Estimates suggest that somewhere around 3% of medical students need formal remediation at some point, and initial success rates after remediation tend to be high, with some programs reporting 77% to 100% of remediated students passing their next assessment. But longer-term outcomes are less encouraging: one report found that while 91% of students passed the semester immediately after remediation, only 61% had completed the full program two years later. That gap hints at the difference between getting a student past one hurdle and ensuring they’re on solid footing for the rest of training.

Pass/fail grading can make remediation somewhat simpler in one sense — the threshold is binary, and students either meet it or don’t — but it can also delay the identification of students who are struggling, since there’s no midrange signal (like a string of C’s) to flag early difficulty. Schools with tiered grading sometimes catch at-risk students sooner through declining grade trends, which is one of the genuine tradeoffs in the pass/fail model that doesn’t always come up in the well-being literature.