This report of the Undergraduate Committee, Center for Teaching and Learning, University of North Dakota, to the University Curriculum Committee recommends the continued use of a system for reporting student progress according to three categories: CR for credit received, CD for credit deferred, and CW for credit withdrawn. After a discussion of traditional systems and non-graded systems and a summary of some relevant research, the report presents the experience of the Center with this grading system as indicated by the responses of students to a questionnaire. The conclusion was that the CR, CD, CW grading system would: (1) encourage student involvement in setting goals and standards in learning; (2) foster an emphasis on the process of evaluation characterized by ongoing mutual, critical and supportive exchange among persons engaged in learning (3) encourage creative exploration of ideas with no discredit of learning through error; (4) not penalize a student for academic failure; and (5) establish an atmosphere of broader exchange and challenge between and among faculty and students. A brief report of the same grading system is included, as well as the questionnaire and responses from faculty at schools of education and employers of teachers. (Author/CTM)