This was the single feature that undermined the study abroad program I just directed. The students who opted to take their language requirement without a grade (i.e.: C- or B- or B+ shows up as a P) did not have motivation to learn Spanish. We have not the authority as a department to alter this, and in fact we might have many fewer students and hence no program at all if we could make them all take the course for a letter grade.
I didn't actually *know* who was taking it for a grade, or not, but I *did* when people started asking if they could skip the final, or how many points they needed to score on the final to get a 70 in the course, etc...
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I have learned from taking MOOCs this summer: bad psychology to let people retake quizzes, and in most cases, take things pass-fail. This is counterintuitive to me but I learned it based on my own behavior, reacting to courses I had assigned myself but did not really have time for.
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