There are far fewer C's in grad school because the students know that if their GPA falls below a certain value, typically around 3.0, then they won't graduate and can get kicked out of the program. Its a study hard and do well or get the heck out scenario. Speaking as one who is almost done with his second Masters, I can vouch that you do indeed have to work hard to get your grades. It is true that you may only take 2-3 classes (I have taken as many as 5) per semester in grad school; however, the amount of time spent in the lab doing research and in the library reading can amount to an additional 40 or so hours a week on top of classes. Add to this teaching assistantships for which one needs to prepare lesson plans and review material, as well as research assistantships in other labs, and you can find yourself virtually living there. I have spent a number of nights in the lab, breaking to sleep on my TA desk while a gel was running. This time committment varies per student and per program obviously, but the proof is in the pudding. Its virtually impossible to fake your way through the final oral exam in front of a panel of PhD's all grilling you on virtually any random topic they wish. Now thats hard.