Nobody who will end up staying in grad school is getting Cs. Like others have said most grad students (myself included) are required to keep a 3.00 minimum.
My classes are sometimes split with undergrads (400 level) or grads only (500-600). In classes that are split, grad students are generally required to answer more questions on a test (5/5 essays instead of 3/5 or something) or write a term paper over a topic. In classes that allow for a term paper (most of them, only 1 did the test thing) this actually means that for grad students lower grades on tests are a little bit easier to remedy because you have a part of your grade (that should be a 100) that the undergrads don't have.
You also get a little bit more "help" from professors, I have a friend in my program, who ended a class at 86.5 average, who got rounded by the professor to an A-. Another one of my friends who was in the same class but was an undergrad, ended with an 88 and got a B+. Not fair but that's how it is with some profs.
In a lot of grad only classes, we don't even have tests. Maybe a take home exam, more likely just papers and discussions.
Those reasons above are kind of why every grad student makes sure that they are all As (or if they can't avoid it some Bs). Everyone knows grad school has inflation at the vast majority of schools, so you always need that 4.0 to prove to employers/PhD programs/Med that you are a strong student.