That was our experience. It was part of the reason we moved to a private school, as it was very demoralizing for my son to watch all of his friends change levels while he didn't. It might not have mattered so much, but at our local public school, all of the in-class reading and at-home reading that was logged was required to be from books brought home from school at the "students level" and my sons hated reading those books that were so far below their reading ability.