The relation of average grades awarded to the average ability of the students was studied in a large sample of colleges. The mean and standard deviation of freshman classes on an ability test, along with the mean and standard deviation of the freshman year grades obtained by classes over a five year period was available for several hundred colleges. Difference scores on the mean and standard deviations were also calculated. Correlational analyses and analyses of colleges that changed most produced the following results: 1) within any given year colleges whose incoming students were bright tended to award higher grades, but there was considerable room for variance from this trend, 2) the average ability levels of colleges change very little, even over five year periods, 3) when the average ability of students increases (or decreases) about the same level of grades are awarded. This is interpreted as suggesting that faculties as a whole have preferred distribution of grades which they use whether their current classes of students are brighter or duller than previous classes. (Author)