The correct choice is "it promotes efficacy by implying that the student is on the path toward achieving a passing grade in the future".
In her TED talk, “The Power of Believing You Can Improve”, Carol Dweck clarifies the force of "Not Yet". Understudies need to pass a specific number of classes to graduate, and in the event that they don't pass, they get an alternate sort of review: "Not Yet” instead of “fail”.