4 ("Genügend" - "adequate") is the lowest passing grade, and
5 ("Nicht genügend" - "unsatisfactory") is the lowest possible grade and the only failing grade (usually earned for less than 50% of the maximum achievable credit).
Students graduating from a Hauptschule usually go on to apprenticeships. In Austria the GPA is the only criterion used for application purposes. All passing grades (1-4) in the Gymnasium permit further university study. All those passing the Matura (which is awarded at graduation from Gymnasium) tend to go on to university. The Matura can be seen as an Austrian form of an International Baccalaureate degree.