It does more than you realize sometimes. I saw what it did to my kids...it can take a long time and many heartbreaking mistakes for a kid to come back to what groundwork the parent lays during those years when the school peer group takes over and the school is drumming nonsense in their heads. Youngest son is just starting to realize what Mom and Dad said is for real....I am not sure if oldest son will ever snap out of his adolescence.
But the peer thing can happen in any school. I didn't go to public school, I spent 12 years in Catholic school, and believe me there wre a lot of things going on that were neither being taght at home or in school.
I had a conversation with my 8yo last night about "Bratz" dolls and why she can't have them even though some of her friends have them. The friends she was talking about are not in her public school class, but in her Sunday School class.