Let me explain the situation in slightly more detail, and you might get what I mean.
Right now I have one specific kid in mind, but I have seen this plenty more than this one kid. He started around 8 years old. He wasn't the most coordinated or the fastest learner, but he was enthusiastic and worked hard. If I were to give him a score for his abilities at each belt level, there was an upward curve from white through green belt (total of 6 belts).
As a blue belt (3 belts, because of the stripes), he didn't really improve his technique, but he wasn't really on a decline yet. It was like he had let off the gas. He's still moving forward with learning the curriculum (i.e. the stuff you memorize for testing). He wasn't getting A grades on his test, but he wasn't failing it either.
By the time he got to red belt, the effects of letting his foot off the gas had started to materialize. Bad habits (i.e. loose fist, dropping the hand in forms instead of keeping tight chamber at the hip) started to creep in. He would rarely kick above his waist, rarely kiyhap above a whisper, and he was quickly losing any crispness in his punches.
He coasted through blue belt, but the sharp decline hit in red belt.
I've already divided the question into 50/50 (as instructor, as owner), but now I'm dividing it in another metric. What to do when you see these blue belts who are on the decline to avoid the steep fall at red, and what to do with those red belts. So now I have four quadrants of the question.