Sounds like new age leadership models I have seen... Attritional Model: Set clear standards on fitness, discipline, honor, academic and leadership, etc. If you fail to meet standards at any point you are dropped. "Developmental"-- Set goal oriented standards for each individual; they may progress at different speeds, but are supposed to meet common standards at the end of the day. Hence, if they fail on occasion, they may not be dropped, but if they fail to correct over time they will be. The problem with this model is you have to have leaders of character with a hard edge, or they will get too attached/vested in the people they are developing and not drop them. Also, if you are skating by academically and having to retake classes you need to be dropped. You could make this model work, but you still need SOME black and white standards. I would recommend zero tolerance on honor (there can be no margin of error here if you want real integrity), physical training(if you can't meet min standards you seriously shouldn't be here, that is easy), and academic (you fail a class you are out)
But I just noticed something - those that fail have to wait until....horrors...June!, to graduate. First of all, it used to be that everybody graduated in June. Besides that, apparently the penalty for being unprepared after 4 years of training is: train for another month :(