At many schools, students have to take a standardized exam called the Graduate Record Exam. This is a determining factor that can help the university place a student and know their needs. It helped advisers to figure out what the student needed, but the exam became more of a hoop to jump through. The GRE scores also stay on a student's record no matter how many times the student takes the test. The highest score doesn't replace the lower one, but accompanies it.
Many differences distinguish a graduate student from an undergraduate student.
The attitude is completely different. A graduate student has to form their own opinion, not just regurgitate another's opinion. Then you have to say why you think this. A graduate degree allows a student to focus on a topic and analyze it thoroughly while an undergraduate student learns more general information. A graduate student, unlike an undergraduate student, really has to know his or her interests.