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Graduation is defined as receiving an acedemic degree. So, advancement would be more accurate. In todays society where everyone thinks they deserve something just for trying (and not actually accomplishing something) the principal is just trying to be real about what is actually happening. You sister is advancing to the next level. She hasn't completed her acedemic goal yet.
the principle might have thought of that so they're not confusing their accomplishments with an actual graduation, or that's just what the teachers constantly say and they just picked up on that.
I told her to call it graduation or at least ask the teacher why they cant, she asked and the teacher said the principals touchy about that.....