President Obama's attention to high school dropout rates has brought an already-contentious issue to the national scene. The U.S. can hardly be expected to compete in a global economy with so many of its young people failing to make it to and through their senior years, or so the argument goes. "[Our] high school dropout rate has tripled since the 1970s," Obama told the Hispanic Chamber of Commerce on March 10, 2009. But had it really? Where had Obama gotten his numbers? Immediately, members of the education community disputed his figures. How we calculate the number of students dropping out and graduating is a key element to the graduation-rate debate, yet one little understood. The fact is that the exact same body of students can have vastly different completion rates, depending on how you calculate them. And No Child Left Behind's consequences for schools, districts, and states that fall short on this front make comprehending these rates that much more pressing.

That's why Fordham asked Christine O. Wolfe, herself a former federal official and Hill staffer who worked assiduously on this issue, to explain these complex formulae and the cogitation surrounding them in a new primer, titled "The Great Graduation-Rate Debate." In these twenty pages, she lays out the most commonly used rates, how they are calculated, where they get their data, and what kinds of assumptions they make. Then she discusses why some rates have prevailed over others, which are more trustworthy, and where the discussion will likely go from here.

Wolfe points out the many variables at play here: Should we count only students who graduate in four years? How do we calculate the number of first-time ninth graders? What about students with nonstandard diplomas or GEDs? How do we tally dropouts and transfer students? Answering these questions raises still more. For example, if we emphasize four-year graduations, are we encouraging "seat-time" over actual learning? And when we talk about ninth-grade enrollment, are we distinguishing between first-time ninth graders and those who are repeating this first year of high school?

These issues aren't just academic. As with many aspects of K-12 education, NCLB raised the stakes on graduation rates. Under its provisions, for the first time, states, districts, and schools must report their graduation rates, disaggregated by subgroup. The thought was that a bit of sunshine and shame should encourage states to shape up--and prevent high schools from pushing out low-achievers as a way to boost their test scores. But spotlighting graduation rates meant that even more parties grew unhappy with how they are calculated. So in 2005, states came together under the aegis of the National Governors Association and agreed to what is now called the "NGA Compact Rate." The NGA recently reported that all states are on track to report their graduation rates via this metric by 2011.

As the Bush Administration neared its close, Secretary of Education Margaret Spellings added a new twist by deciding to reinvigorate NCLB's graduation-rate regulations. Pursuant to her changes, states are required to adopt a common rate for all students, to use the same calculation formula within a few years, and to embed graduation rates--disaggregated by all of NCLB's subgroups--into measures of "Adequate Yearly Progress." In other words, to make AYP, high schools would now have to both hit test score targets for all of their subgroups, and hit graduation rate targets for all of these groups too.

These complications leave us with many remaining questions, centered mostly on how the Obama Administration and Secretary Arne Duncan will deal with graduation rates, especially as these pertain to accountability and NCLB. We've had a few hints--including Duncan's decision to support Spellings's 2008 regs--but big questions remain: Will the Department enforce the new regulations and how far will it go to intervene in states that fall short on making sure more students graduate?

As they work through these decisions, they should pay attention to some key issues. First, it is not clear that graduation rates reflect school effectiveness. Is it fair to penalize high schools when their feeder schools send them sorely underprepared students?  And by tying graduation rates to AYP metrics, aren't we encouraging states, districts, and schools to lower their diploma standards in order to get more students across the finish line? The problem of perverse incentives has plagued other aspects of NCLB, and we'd be wise to be wary of spreading it to yet another important metric--and turning a diploma into a slip of paper that means even less tomorrow than it does today.

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