Graduation rates are an important indicator of high school performance. Accurate counts make it possible to hold schools accountable for improving outcomes; and to target resources and interventions to the low-performing schools most in need of effective support.

Developing common, accurate graduation rate calculations is a critical first step toward understanding and addressing the nation's graduation rate crisis. Despite a requirement in the No Child Left Behind Act (NCLB), and a pledge by the nation's 50 governors to adopt and use accurate and consistent measurements, states continue to use a range of U.S. Department of Education-approved graduation rate calculations that significantly underestimate the number of students dropping out each year, citing a lack of data and capacity to implement more reliable calculations. As a result, reported graduation rates obscure the crisis, particularly for poor and minority students; make it impossible to compare graduation rates across schools, districts, and states; and undermine efforts to focus resources and interventions on low-performing high schools.

There is increasing recognition that more (and better) data is necessary to provide accurate graduation rate calculations and improve practice and policy on many levels. Every state needs a high-quality longitudinal data system that tracks individual student data from the time a student enters the educational system until he or she leaves it. Many states are undertaking efforts to build these systems, incorporating into them the ten essential elements identified by the Data Quality Campaign (DQC), a national collaborative effort to support and encourage state policymakers to improve the collection, availability, and use of high-quality education data. Few have yet put all ten elements in place or built educator capacity to use data to improve teaching and learning.

Many accountability systems are using school performance information (such as test scores) to hold high schools responsible for student outcomes. In most cases, there is failure to focus on graduation rates in addition to test scores. This can lead to unnecessarily holding back or "pushing out" students in an effort to raise test scores. And high schools with high test scores but low graduation rates are not encouraged to or supported in raising their graduation rates.

Under NCLB's Adequate Yearly Progress (AYP) system, graduation rates are not defined consistently, disaggregated by subgroup, or required to improve significantly over time in the same way that test scores are. High schools can make AYP despite a consistent, or even a growing, graduation gap; and a high percentage of dropout factories - high schools that graduate less than 60 percent of their students - make AYP. As a result, AYP is undermined as a useful tool for holding high schools accountable for improving student outcomes and for identifying high schools that need assistance.

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