In Thailand, everyone knows what a 50% (GPA 1) really means (the actual score was 0-50%). Kids try to avoid it if possible. Some schools actually tell teachers they cannot give less than a 3GPA or some score like that). Fortunately, mine isn't on of them. As you mentioned, even in the US these days, kids do not fail and asked to repeat a year. At the end of the day out students will still need to sit entrance exams, SAT, IELTS, anyway, so it's up to them to put in the hours to pass them or meet the minimum requirements for university entrance.