Thanks for your question, Lindsay. As a former U.S. diplomat, I can tell you that yes -- the Foreign Service Officer exam is difficult, and the pass rate is quite low. But it is difficult in a fairly unique way: The State Department is not really looking for an expert in any particular area when it screens for potential diplomats. Instead, it is looking for people who are curious and self-motivated to learn about almost anything.
Let me give you two examples from my test experience: On the written exam, I had questions on a lot of predictable topics (foreign policy, government, economics, history, and English comprehension), but I also had questions touching upon early 19th century Russian literature, late 19th century urban architecture, business management theory, and three questions on modern dance (!). Seriously.
The point I would like to get across here is that I didn't need to be an expert in any of these areas. Rather, U.S. Foreign Service Officers need to be generalists; that is to say, people that are open, curious, and confident, and willing to carry those character traits to anywhere in the world, at any time, to do just about anything. The State Department will teach you specific necessary skills and languages, support you in your missions, and even tell you exactly what to say to foreign officials. What it can't do is make you a broadly interested -- and thus, broadly interesting -- person. The Department has to FIND those people. That's what the test is looking for. The scenario I encourage you to consider would be: Could our government teach you a foreign language, tell you six specific things to say and three to listen for, brief you on social customs, and then drop you off at a black-tie reception for 500 people you've never met before...and come pick you up three hours later confident that almost everyone of those people would say, "Hey, that Lindsay -- she was great! I'm really looking forward to talking with her again!" Could you achieve the same outcome after eating roasted goat in the Hindu Kush with fifty Taliban supporters? If so, we need you to become a diplomat. It is ALL about communication. And communicating with people more than once.
Why would people talk with you? Because you're interesting. You know about foreign policy...but you also know a little bit about Russian literature, architecture, fly-fishing, poker, antique cars, insect biology -- heck, even modern dance. And because you're so obviously interested in THEM, and in what they find interesting. That's it.
Sorry for the long answer. If you are still reading, I will close with the best advice I ever heard about taking the test: Pick a good "national" newspaper and read EVERY word of EVERY article in EVERY section EVERY day for one year. Worst case scenario: You'll learn about things you never thought of before. Best case: The FSO test will be merely an interesting little challenge on the way to a pretty terrific career.