Click the pencil icon under the Next Assessment column to the right of the student's name:
In the side panel that appears, use the Reading Level drop-down menu to select a different level. The letters align to Fountas & Pinnell Guided Reading Levels. The text in parentheses indicates the corresponding grade level.
Note: If you want to change multiple students to the same level, click the checkboxes to the left of the students' names. Then, click the blue Assign Next Assessment button along the top: