Short version: At least 20 years ago or so, Purdue University allowed E grades, "conditional failures." This dusty grade option, unlike the flat-out F failing grade, could not be replaced with the grade from a second shot at the class, but rather changed the E to a C upon the completion of one or more class assignments. Thus the E grade allowed a student who would otherwise fail the course, to finish some course work and have the E changed to a C. The only other option was to fail to do the required work at which point the E would automatically change to an F, a full failure.
The E was thus a clever attempt to foil the system vandalism and grade-gaming of certain students clever enough to realize they would earn a higher overall GPA by intentionally failing a difficult (or inconvenient) course so that they could take the course again--probably with a different instructor who had no way of knowing this was not the first time this student had been through this class--thus gaming the system by patching a "reset" into each course. If you do well, great. If you don't do A work, then intentionally fail the class so you could take another shot at the A. Repeat as necessary, but once committed to the fail-reset option do not fail to actually fail the class. C or D grades are unacceptable because only a complete course failure would allow the retaking of the course and offer another shot at getting that A..
The more complete story:
At Purdue, an interesting find became an insurance policy against a certain form of gamesmanship by clever students.
A few instructors discovered among the dusty pages of serially ignored academic policies an E grade, and came to understand this dusty and overlooked grade option as a tool agaisnt the few students who would rather work hard at gaming the system than working hard and mastering the course.
The F grade was, of course, for failing a class.
The E grade was "conditional failure."
This is why it mattered, and why this makes the comic even more striking, if it occurs in a university with an E conditional failure grade:
Any students who get an old-fashioned F on their grade report, may retake the class until they receive a grade other than E or F. So the first non-failing grade would be the grade used to calculate GPA. Even though failed attempts at retaking specific classes are a part of the academic transcript, any failed class could be retaken with no penalty to GPA. The catch--to protect the system against "career students" who kept taking classes over and over until they managed to grab a 4.0 GPA, is that only failed classes could be retaken without affecting their GPA.
In short, the student who received four consecutive failing grades for the same class, then experienced the light and earned a shiny A, and the student who scored the easy A the first time through the class, would end up with the same effect on their GPA!
The trick was to be very certain to fail the class. If you somehow miscounted and received a D, that was the end. You could retake the class, but the D=1 would be part of the calculation for your GPA forever. If you won the elusive F grade, however, only the grade for the successful pass--even if it was an A--became part of your overall GPA calculation.
Hence the beauty of the forgotten E.
When reporting an E grade for a student on the end-of-semester grade report, the instructor notes what assignments are required to resolve the E. Very simply put, when you successfully finished the required assignments the E turned into a C. Yet unlike a real F, any class failed conditionally could not be retaken for a higher grade! The only option was to complete the missing assignments at which time the E automatically translated into a course C, or to ignore the E which then, also automatically, became an F for the class--GPA-wise, F=0.
Pragmatically, the knowledge that a specific instructor "had the E and wasn't afraid to use it" would take the "intentional F ploy" right off the table. The student could either actually engage in the class as a real student working to achieve as high a score as was possible, or to risk the F (without opportunity to retake the class to replace the F) and ensuing effect on their GPA. For the instructor armed with the E could turn in the list of class assignments the formerly crafty student failed to complete with the E grade and walk away, free. The Registrar's office would take over the issue, monitoring either the completion (C=2) or the failure to complete (F=0).
. . .
I don't know how this could ever be communicated in a strip. . .