In order to change a Student's grade level, the Smart Tuition Contract has to be deleted. Once the Smart Tuition Contract is deleted, you will be able to change the Student's grade level and a regular onBoard contract may be issued and  an admissions manager would need to manually mark the contract as returned. 
Warning: If a second Smart contract is assigned, the responsible signer will not be able to complete the contract without an error letting them know that they already exist in Smart.