At my school, you have to repeat the whole year if you fail a class. We don't get letter grades, either... you get honors, high pass, pass, remediate, or fail. If you get a "remediate," you have the option to take the class over during the summer, rather than repeating the whole year. The good news is, there is SO much academic help available. It's very hard to fail a class... the school will do whatever it takes to help you out. I believe most med schools are this way. And, as turtleboard said, your board scores, letters of rec, etc. are all very important to residency apps.