"Relying on formal exams for student assessment is beneficial as it makes students study hard and allows schools to know their students' knowledge..."

[hardyweineberg]

"Relying on formal exams for student assessment is beneficial as it makes students study hard and allows schools to know their students' knowledge level"

1) Is it okay to say "students' knowledge level"?
2) Did I use "it" grammatically?
3) Is the sentence grammatical?