Caltech did it right. Professors were not allowed to grade based on attendance. If you could pass the final, you passed the class. If you could pass the final without even taking the class, you would get credit (although very, very few managed that feat!).

I recall one student who flunked thermo. He filed a complaint that the Prof had it in for him, hence the F. The Prof provided evidence that he never did any of the homework, and flunked the midterm and final. Case dismissed. The student dropped out.