Did not try to watch it, but saw a cap at Moero Amazon:

Initially I managed to misunderstand how it worked, but it suddenly dawned on me that the tie color stays with the class as they progress through years. So, the tie is not a badge of rank, which would make too much sense, perhaps.

Colors probably rotate through 3. From a flashback we know that Sawa-chan-sensei was in a bordeaux year like Azusa.

UPDATE: Janette notes: "Also, is it just me, or has the animation improved significantly since season 1?" I dunno. Screencaps seem about the same...

UPDATE: 2DT confirms that the color tag system works the same way elsewhere.

UPDATE 2011: Updated with picture of Sakabe, 2 years older than the main crew.