I think grouping kids is a good thing because it challenges kids. For example: if a student excels in a class that is too easy, eventually they will stop trying. However, if placed in a higher-level class they will be forced to try their best. If students are set on a level playing, they tend to become competition amongst each other, thus encouraging learning. Grouping students also helps to get every concept taught to every kid at the right pace for that individual, leaving no student behind. Students are more likely to get one on one time with teachers as well.
Despite it’s positives, grouping tends to hurt kids’ self esteem. Students that are placed in lower classes may feel discouraged and might even give up, saying that they’re “too stupid”. However being placed in a lower class could also have the opposite effect, causing students to work harder in attempt to bump up to a higher level class