MELBOURNE, Aug 1 - A new system introduced in Victoria has overhauled the way schools grade students in reports, setting the bar a lot higher than before. 

'A' grades will now only be awarded to students who are 18 months ahead of the expected level for their age, instead of 12 months. 

Students who are six-to-12 months ahead will now receive a 'B' rating and those working at the expected level will get a 'C.'

Principals have been left scrambling to explain the changes to parents and students, some of whom mistakenly thought their grades were slipping.

"It is about educating parents and students that the bar has been raised and therefore it's that little harder to get an A than it might have been at the end of last year," Victorian Principals Association president Anne-Maree Kliman told ABC radio on Tuesday.

Parents Victoria executive officer Gail McHardy said that high-achieving students were disenchanted by the changes. 

"Students who are achieving great results on their work should have that reflected in their reports," she said. 

Parents Victoria has received many complaints from parents who say their children were blindsided by the changes, McHardy says. 

"Parents are not happy with these grading changes and were disappointed that Parents Victoria and parents were not (informed)."

The Department of Education has been contacted for comment.