Ultimate Xavier Institute
In the same way that you can disappoint your parents, it is easy to start acting in ways that are outside of Xavier’s vision for the new mutant race. Excessive use of violence, getting your team into serious danger or even just cheating on a test will all reduce your standing in the eyes of the staff.
Edges that you have already learned are not affected by a drop in Kudos. But, you can only train a new edge if you start the session with sufficient respect level to allow you to learn the edge. Once your Kudos decreases below the rank requirements, you must increase it again before you can learn any further edges of that Level.
Although Xavier and the staff may have high expectations for the behaviour of their students, the same does not necessarily hold true for other mutant organisations.