[aesovs]

I think the way to handle this is unique to each organization. Could you talk to an advisor about it? Or maybe an alum who might know more?

For my GLO, this would be a standards issue and the officer would more likely than not be asked to step down, but I can only speak for my specific chapter of my GLO; it could be different for your chapter. Basically, though, the point of holding an executive office is not only to serve your fraternity, but to set an example for other members. Regardless of personal situation (obviously barring extreme cases), this officer should've known the consequences of making bad grades, especially if it's something you stress during officer selection and elections.

As for the lack of interest in the position, that's probably secondary to allowing a member not in good standing to hold office. I'm sure you could probably rope someone into it, and if not, then maybe the officer with the bad grades could come back after a semester on probation? Provided he's re-elected into office and meets other requirements, of course.