Performance on proficiency exams can be a key determinant of whether students are retained or “held back” in their grade. In New York City, passing the statewide proficiency exam essentially guarantees promotion, while roughly 13% of those students who fail the exam are retained. Using regression discontinuity methods, we find that female students are 25% more likely to be retained in their grade due to exam failure than boys. Hispanic students are 60% more likely and Black students 120% more likely to be retained due to exam failure (relative to White students). Poverty and previous poor performance also increase the likelihood of retention, while being young for grade or short does not. We conclude that “patterned discretion” exists in how standardized test results are utilized.