Many colleges and universities require students to select a mandatory core curriculum of general education classes, along with the specific courses required for their majors. These required courses and major-oriented electives are given standard letter grades, and the student's grade point average (GPA) is calculated from those scores. However, many students have the option to take elective classes for a grade known as pass/no pass. A pass/no pass class is usually an elective course outside of the student's major or core curriculum, taken for personal edification or self-interest.

The rules for arranging a pass/no pass grading option vary from institution to institution, but in general, the student must be in acceptable academic standing before requesting the option. Many colleges require students to consult with their academic advisers before taking any pass/no pass classes, since the credit for such courses does not always count towards graduation. Advisers need to know that the pass/no pass class is not replacing a vital course in the student's major or core curriculum schedule. The pass/no pass option rarely if ever applies to required courses, only to electives outside of a student's major.

One advantage of a pass/no pass class is the reduced emphasis on grading and overall GPA. Many students attending school on scholarships and financial aid programs must maintain a certain GPA in order to remain eligible for the funding. An art major may have a personal interest in a business course, for example, but he may fear lowering his overall GPA if he takes the class for a grade and fails. Under the pass/no pass system, the art student can attend the business class without the pressure of making a specific grade. The pass/no pass grade is not factored into a student's overall GPA.

Many colleges and universities treat the pass/no pass option much like an audit, which means that the student must complete all of the required course material in order to receive the grade. In many cases, the instructor is not even aware of a student's pass/no pass decision. The instructor assigns a letter grade for the student's performance, which is converted to a P or NP designation later.

In general, grades of D or higher are considered passing, while an F is considered a no passing grade. Some institutions use a grade of C or higher to determine pass/no pass. These policies are usually defined in a student's handbook. The pass/no pass option should not be viewed as a 'get out of class free' card, but more as an opportunity to gain personal knowledge without the pressure of grades or GPA maintenance.