Published: July 19, 2007

States Inflate Graduation Rates

An EPE Research Center analysis of graduation rates conducted for Diplomas Count 2007: Ready for What? Preparing Students for College, Careers, and Life After High School reveals that state-reported graduation rates may not be accurately capturing the magnitude of the dropout problem.

In 2003-04, the average state reported a graduation rate of 83 percent to the U.S. Department of Education. By comparison, the EPE Research Center’s Cumulative Promotion Index estimated that only 70 percent of public school students graduated with a standard diploma that same year. ("Graduation Profiles," Diplomas Count 2007, June 12, 2007.) The CPI rates for minorities are lower still, with about 53 percent of black students and 58 percent of Hispanic students graduating in 2004.

Differences Between State-reported and CPI Graduation Rates, 2003-04

State-reported graduation rates in 2003-04 were higher than rates calculated using the CPI in every state except Alaska. The difference between North Carolina's state-reported rate and the CPI rate was the largest in the country, reaching nearly 30 percentage points. South Carolina, Massachusetts, and Mississippi all reported graduation rates more than 20 percentage points higher than the rate calculated using the CPI method. (To view state and district graduation rates, visit the EPE Research Center’s new online mapping tool).

Those findings mirror the results of a similar analysis conducted for the 2006 edition of the Graduation Project, Diplomas Count: An Essential Guide to Graduation Policy and Rates. That analysis also found that states consistently report higher graduation rates than those calculated using the CPI method. Washington was the only state that reported a lower rate than the CPI calculation for the 2002-03 school year.

There are several explanations for the discrepancies between state-reported and CPI rates. Although graduation rates are a required academic indicator under the No Child Left Behind Act’s provisions for defining and measuring adequate yearly progress, states exercise substantial autonomy when deciding exactly how they will respond to the mandates of the federal law.

An EPE Research Center analysis of state policies related to the implementation of high school graduation accountability under NCLB reveals that states are using a variety of different methods to calculate graduation rates, with some of those methods believed to significantly overestimate the number of students finishing high school with a standard diploma. ("Implementing Graduation Accountability Under NCLB," Diplomas Count 2007, June 12, 2007.) An examination of state accountability workbooks and supplemental sources finds that states’ methods fall into five general categories.

States that reported rates significantly higher than those calculated using the CPI often employ graduation rate methods thought to significantly overestimate high school completers. For example, until the current school year, North Carolina used an on-time graduation rate, which reports the proportion of all high school graduates in a given year who receive a standard diploma in the expected amount of time (as opposed to taking more than four years to finish high school).

After implementing a cohort rate methodology in 2006-07, North Carolina’s reported rate fell to 68.1 percent for the class of 2006, a precipitous drop from the state's on-time rate of 96.1 percent in 2005. A cohort calculation tracks individual students and can account for transfers into and out of the school system and students retained in grade, providing a much more realistic picture of the dropout problem in a particular state.

Methods Used by States to Calculate Graduation Rates Under NCLB

The most common method used by states to measure graduation rates is the leaver rate, with 32 states employing this method for 2006-07. The leaver rate expresses the percent of students leaving high school with a standard diploma as a proportion of all those documented as leaving with a diploma or other completion credential or as a dropout. Difficulties associated with documenting dropouts can cause states using this method to inflate reported graduation rates.

Efforts from organizations like the National Governors Association and Data Quality Campaign are encouraging states to adopt more accurate and consistent methods for calculating graduation rates, which may help alleviate the discrepancies between state-reported graduation rates and those calculated by independent researchers. ("Efforts Seek Better Data on Graduates," July 27, 2005.) In 2005, the NGA unveiled its Compact on State High School Graduation Data Requires Adobe Acrobat Reader . Signed by the governors of all 50 states, the Compact served as an important impetus encouraging states to produce more realistic and consistent graduation rates.