Grading students from A to E in their twice-yearly reports can fail to help them reach their academic potential, a leading education researcher says.

Australian Council for Education Research chief executive Geoff Masters said the traditional grading system was poor at lifting the performance of the brightest students and those struggling to meet expected standards.

"I think we can do better than the traditional forms.": Geoff Masters.

And the system did not necessarily provide an accurate picture of what students knew and could do at school, he argued.

''It often fails at both ends,'' Professor Masters said. ''It fails the least advanced students by telling them they're poor learners year after year, and it often fails the highest-achieving students by not stretching and challenging them.''