In 2003, Chicago schools required students entering ninth grade with below-average math scores to take two periods of algebra. This led to higher test scores for students with both above- and below-average skills, yet failure rates increased for above-average students. We examine the mechanisms behind these surprising results. Sorting by incoming skills benefitted the test scores of high-skill students partially through higher demands and fewer disruptive peers. But more students failed because their skills were low relative to classroom peers. For below-average students, improvements in pedagogy and more time for learning offset problems associated with low-skill classrooms. In some cases, classrooms were not sorted, but below-average students took an extra support class simultaneously. Test scores also improved in such classes. (Contains 17 notes, 5 tables, and 1 figure.)