According to what you said, it should be that your credits are much worse. The school extended your study period and charged you a year's tuition. This is legal!
Students can't meet the graduation requirements, and they fail to take the make-up exam. Generally, you can go back to school to make up the exam within two years. As long as you pass, the school can get a diploma and a degree certificate. However, if many courses fail, their study period in school will be extended! And you should pay tuition and room and board!