Problem: Medical students perceive honors grading during core clerkships as unfair and inequitable, and negatively impacting their learning and wellbeing. Eliminating honors grading, a powerful extrinsic motivator, and emphasizing formative feedback may address these problems and promote intrinsic motivation and learning. However, it is unknown how transitioning from honors to pass/fail grading with enhanced formative feedback in the core clerkship year may affect student learning experiences, wellbeing, and perceptions of the learning environment. Intervention: Core clerkship grading was transitioned from honors/pass/fail to pass/fail at one US medical school. In addition, the requirement for students to obtain formative supervisor feedback was formalized to twice per week. Context: This qualitative study utilized semi-structured interviews to explore the perceptions among core clerkship students of learning and assessment. Interview questions addressed motivation, wellbeing, learning behaviors, team dynamics, feedback, and student and supervisor attitudes regarding assessment changes. The authors analyzed data inductively using thematic analysis informed by sensitizing concepts related to theories of motivation (goal orientation theory and self-determination theory). Impact: Eighteen students participated, including five with experience in both honors-eligible and pass/fail clerkships. The authors identified three major themes in students' descriptions of the change in approach to assessment: student engagement in clerkships, wellbeing, and recognition of learning context. Student engagement subthemes included intrinsic motivation for patient care rather than performing; sense of agency over learning, including ability to set learning priorities, seek and receive feedback, take learning risks, and disagree with supervisors, and collaborative relationships with peers and team members. Positive wellbeing was characterized by low stress, sense of authenticity with team members, prioritized physical health, and attention to personal life. Learning context subthemes included recognition of variability of clerkship contexts with pass/fail grading mitigating fairness and equity concerns, support of the grading change from residents and some attendings, and implications surrounding future stress and residency selection. Lessons Learned: Students perceive a transition from honors grading to pass/fail with increased feedback as supporting their engagement in learning, intrinsic motivation, and wellbeing. Drivers of wellbeing appear to include students' feelings of control, achieved through the ability to seek learning opportunities, teaching, and constructive feedback without the perceived need to focus on impressing others. Ongoing evaluation of the consequences of this shift in assessment is needed.