You can use the Batch Update button to move children from one grade to the next at the beginning of each school year.
Click on Children --> Enrolled and you will see the "Batch Update" button in the upper right of the page.
On the Batch Update screen you will see all the children (All Rooms) listed there. Change "All Rooms" to the room with the oldest children and verify that it is empty (they should have been Graduated last year).
Now change the "Batch Update Children From" field to the room for the next grade down. You'll see a "Quick Change All Fields" tool show up right above the list of names. Change that field to the room the students are going into (in the current example, that would be the "oldest kids" room) and click "Update Children" button.
Go down the line for each grade until you have moved everyone into the correct class. Then you can add the new children for the year by using the "Add Child" button under Children-->Enrolled or if you have more than 30 children to add you can send us a spreadsheet.
Tip: You might consider a different approach, instead of Grade Level you can use the year of graduation for children as their "Classroom". That won't change from year to year and still separates them by "grade". It might help alleviate this yearly grade level change.