Segregation can be a good thing.
Small classes (that is the correct term, ja?), maybe 15 students at the most, divide them up based on ability, not how many years they've been in school. Some people are extremely good at math, some are not, keeping the same pace for everyone will just have many people sit there wasting their time away doing nothing, and others would be hard pressed to keep up.
Education based on the ability people had would improve the education for everyone instead. The most important thing is to always keep the pressure up, but to never let it start to ackumulate. If you have more work at any given time than you're capable of, you're going to lose motivation, you're going to get even more behind. If you don't have enough work you'll also lose motivation, and start doing other things.
In school it's very important to learn TO study, TO work, it's not just what you're studying, or what work you do. It's learning to do it that's important, someone with the habit of looking things up, or picking up new information will do that on their own when they encounter something they're unfamiliar with.
Education should also be tailored. People learn in different ways. Not everyone is best taught by being told to read a passage, and then answer five questions about it, or to read something over and over, or whatever.
We also need to remove all the elitist crap from schools, it's not about getting high grades, churning out excellent students, and least of all making it a business (like it already is in many, many countries). Schooling is about turning people into functional, productive members of society, able to fend for themselves in whatever career they may choose to pursue, that's the most important thing taught in schools. Learning to work (wether paid or unpaid), interact, learning to learn, and to open your mind, to be critical, and question. It's about attitude, what we learn early will stay with us all our lives. Knowledge can be supplemented later, but the ability and willingness to learn can't.
So not all students are excellent at what is typically seen as intelligent pursuits, deal with it, adapt. Some people aren't fit for higher education. Some people won't get straight A's, some people aren't highly intelligent, or what is normally considered to be highly intelligent. That doesn't mean those people are less valuable, or that they can't do anything. We just need to adapt our school model to that, to our students, instead of standardising everything, and trying to use the same approach on everyone. That works in a factory, massproducing chairs, not on people.