Traditional grading was replaced with the Honors-Pass-Fail (H-P-F) grading system in graduate education courses at Herbert H. Lehman College in the fall 1971 semester. The purpose of that action was to determine if the H-P-F system might differentiate more effectively between exceptional and average student achievement. The general findings of the study, which assesses and compares the two systems as barometers of student achievement and evaluates student and faculty reactions to the H-P-F system, are as follows: a) the H-P-F system discriminates more sharply between exceptional and average student achievement than the A-B-C-F system; b) almost three out of four graduate education students who were graded under the system approved it; c) more than half of the instructors who used the H-P-F system and three-quarters of those who did not approved the H-P-F grading system. (Tables included in this report show a comparison of grade distributions for the two systems and faculty and student response to the H-P-F system.) (Related document is SP 006 980.) (JA)