One of the milestones as a Ph.D. student is to clear your qualifying your examination. In our University we have to clear it within first two years. It is basically letting the school know that you have identified a problem in the literature and it is worth spending time, trying to solve it. It is an important milestone because your stipend will be held if you have not completed the exam. Anyhow, I cleared the exam and the school thinks that it is not completely out of their interest to retain me here..