It is the second scenario you listed above. The actual percentage of students who start at FMU as pre-nursing but do not get into the program is fairly high. This is because nursing is going to be very competitive anywhere you go. If you find a school that has a high percentage of students who get into their program, it is probably not the greatest program. We have students from all over trying to get into our nursing program, as does every other nursing program that I know of.
Essentially, if you do well (3.2 or better) once you start at a college or university, you should not have a problem. Students who are right at 3.0 or below are going to find it much tougher.