What does Scout mean when she says, "most of the first grade had failed it last year"? What does this comment suggest about education in Maycomb County?

Most of the first grade had failed in recognizing the alphabet the year before.

Then she went to the blackboard and printed the alphabet in enormous square capitals, turned to the class and asked, “Does anybody know what these are?” Everybody did; most of the first grade had failed it last year.

This shows how disconected the kids of Maycomb are with formal education.