Something like that... Most people get a "Pass." The top 10% in each course gets an "EPR", which is the equivalent of a high pass. And if you do really poorly, they probably won't fail you... they'll just give you a "Marginal Pass."
Most students think that EPRs are generally overrated and not that important, since they do not appear on your transcript and are really only useful if you want to get into a UCLA specialty program.