A university's odd rule that inevitably affects students' final grades
I am assuming this is US. I want to suggest an alternative. Kindly ask your references to add the situation in their recommendations. I don't think Bill Nace's suggestion is exactly the right one, simple because of this answer. From questions regarding SOPs and from some personal experience I understand that at least some admission bodies in US universities do:
- only glance over SoPs
- Eliminate a significant (sometimes even more than half) of the applicants based on numbers (gpa, gre etc.) without even looking at anything in the application.
Now, nothing you can do right now that can help you in the second part except for scoring really high on your standardized tests. Even that won't be that useful as anonymous physicist points out in the comments. I heard people joking about getting someone to read your application as being the hardest part of an application (in US). You will need to somehow manage that. Probably good portion of your applications will end before a pair of eyes can lay on it. When, if, you get over that stage, 1 applies. They will read your recommendations more carefully than your SoP almost always.
Also, I would strongly suggest looking into graduate programs in other countries. I had much better experiences with European ones. They were always free and much easier to apply (in my case). Instead of dumping another 100 hours to a menial test, I reckon you can find and apply to 20-30 suitable master's programs in Europe.
Yes, mention it, but don't make a big deal out of it. A single sentence like
"With regards to my transcript, please note that the lower averages in my first three semesters were due to the University's 78% rule, that is fully described elsewhere on the transcript."
Any more than that will look like you are whining or trying to make excuses.
But, this statement can be very helpful to those who have to read your application package.
Source: I've read many application packages.