This investigation of failure in the first two grades and the effectiveness of group counseling upon the failing children seeks first to determine whether students who have failed hold a different self-concept or attitude toward school from those of students who have not. The second aim is to determine the effect of group counseling on self-concept and attitude toward school of failing students. The third purpose is to analyze the implications of these findings for elementary school counselors and teachers. The investigation's two phases include a survey study and an experimental study. The ninety-six subjects for the survey phase were selected by identifying forty-eight first and second grade students who failed their grade level in the 1972-1973 school year, and by randomly selecting a control group of forty-eight second and third grade students who had not failed a grade. For the experimental phase of the study, the forty-eight failing students were divided into an experimental group and a control group. Twenty-four were randomly placed in the counseling groups, with the remaining twenty-four as a control group.