Are you attempting to add a new school enrollment for the upcoming school year? If this is the case, then in the student record, go to the "Scheduling Setup" screen. Enter his "Next Year Grade" and "Next Year School" (your school).
Then, when the "End of Year Processes" are run, it will close the current year school enrollment, will create a new school enrollment for the upcoming year, and will increment the student to his new (nyr) grade.
You will need to populate these fields for all of your current students. There is documentation regarding EOY (end of year) processes in PowerSource.