Im struggeling to accept public education for my kids.

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My Son is a smart kid. He reads at a 3rd grade level and he is only in first grade. The teacher tested him and at first she had him at the right level or one close to it. Now I check and she has brought him back down to normal so he feels like he is successful. I talked to her about it and she thinks it is the right thing to do. At home he reads chapter books and at school he is reading books with two to three words per page. I want him to feel successful but I want him to learn and be challenged too. He reads at school then he has a book he takes home to read. It should take kim 20 minutes and he finishes in 2 so we fill in with our books from home. I understand no child left behind, but is it really necessary to keep the ones that can go ahead behind to keep it all fair? And if this is happening with my kid how many other kids are dealing with this too and their parents dont know?