The United States has made great strides in secondary school participation during the last century. Yet more than one-quarter of first-year high school students do not receive their diploma in four years. By age 24, more than one in 10 still do not have a high school degree or its equivalent. During the 2003-2004 school year alone, nearly 5% of students dropped out of high school. In addition, rates of graduation, completion, and dropping out vary significantly by race/ethnicity and immigration status with very high rates among Hispanics and new immigrants. The Elementary and Secondary Education Act of 1965 (ESEA), as amended by the No Child Left Behind Act of 2001 (NCLBA, P.L. 107-110 ), contains several provisions pertaining to the issue of high school graduation, completion, and dropping out. The law authorizes several programs and activities intended to prevent students from dropping out or to encourage non-completers to reenter school or enroll in a high school equivalency program. The law also contains requirements for state and local education agencies that stipulate how graduation, completion, and dropout rates are to be calculated and to whom they must be reported. Two of the three federal programs whose purpose is primarily intended to prevent students from dropping out of high school are authorized in ESEA, Title I, Parts D and H. Both Part D, the Neglected and Delinquent program (N&D), and Part H, the Dropout Prevention Program (DPP) have dropout prevention as their primary purpose. The third federal program with dropout prevention as its primary purpose is the Migrant High School Equivalency Program, authorized in Title IV, Part A of the Higher Education Act of 1965 (HEA), as amended by the Higher Education Amendments of 1998 ( P.L. 105-244 ). The federal government supports additional programs that have dropout prevention as one of several purposes. These include some of the Trio programs and the GEAR UP program (authorized in Title IV of the HEA) as well as several programs authorized in the Workforce Investment Act of 1998 ( P.L. 105-220 ). Support for dropout prevention is also part of the broad array of programmatic purposes covered by large federal programs such as the ESEA, Title I-A, Program of Education for the Disadvantaged. Each of the act's authorizing the major federal dropout prevention programs is likely to be considered for reauthorization in the 110 th Congress. Passage of the NCLBA authorized the ESEA programs through FY2007. A one-year automatic extension, through FY2008, is provided under the General Education Provisions Act (Title IV of P.L. 90-247, as amended). Authorization for the HEA programs is extended through June 30, 2007, under the Third Higher Education Extension Act of 2006 ( P.L. 109-292 ). Authorization for WIA programs expired on September 30, 2003, although annual appropriations have continued funding for WIA through FY2007. It is likely that the 110 th Congress will consider reauthorizing some, and perhaps all, of the federal programs and provisions pertaining to high school graduation, completion, and dropouts. This report will provide background on high school graduation, completion, and dropout rates in the United States. First, it will discuss the NCLBA provisions related to the calculation and reporting of these indicators. Second, the report will present the latest data on high school outcomes. The third section of the report will describe the federal programs designed to improve these outcomes. And finally, the report will discuss and analyze issues that may arise as Congress considers the reauthorization of these programs and provisions. The NCLBA contains a handful of provisions that require the calculation and reporting of high school outcomes. Graduation rates are among the indicators states must report under the NCLBA Adequate Yearly Progress (AYP) provisions. Dropout rates must be reported by states as a condition of their participation in the N&D and DPP programs. In addition to these ESEA provisions, the Education Sciences Reform Act of 2002 ( P.L. 107-279 ) charged the National Center for Education Statistics (NCES) with compiling rates of high school completion. A fourth measure of high school outcomes discussed in this section (although not statutorily mandated) is what NCES calls the "average freshman graduation rate." Through passage of the NCLBA, high school graduation rates were added to existing Title I, Part A, requirements for state-developed standards of AYP. That is, in addition to assessments of academic achievement in mathematics and reading, state AYP standards must also include at least one additional academic indicator. Public schools and local educational agencies (LEAs) must meet state-specified levels on this indicator in order to make AYP. In the case of high schools, this additional indicator must be the graduation rate. The NCLBA defines the graduation rate as "the percentage of students who graduate from secondary school with a regular diploma in the standard number of years" (ESEA, Section 1111(b)(2)(C)(vi)). The standard number of years is determined by each state and is generally based on the structure of schools, usually three or four years. The NCLBA does not require a minimum graduation rate or that states increase their rate over time. The law also does not require states to report graduation rates to the Education Department (ED); it simply requires each state to place the statewide graduation rate on its report card to the general public. The NCLBA also charged the Secretary of ED with assessing the impact of Title I on states, districts, schools, and students (ESEA, Title I-E). A portion of this research is to be "an independent study of assessments used for State accountability purposes and for making decisions about the promotion and graduation of students" (ESEA, Section 1503(a)). The statute goes on to specify that the research should address the effect of assessment and accountability systems on, among other things, changes in the graduation rate. The Secretary was given authority to award a contract to an independent research entity and not more than five years to complete the study. The NCLBA authorized the DPP (ESEA, Title I-H) and stipulated the method to be used in calculating the high school dropout rate. The provision states that, For purposes of calculating an annual school dropout rate under this subpart, a school shall use the annual event school dropout rate for students leaving a school in a single year determined in accordance with the National Center for Education Statistics' Common Core of Data [CCD]. (ESEA, Section 1829) The NCES defines an event dropout rate as the percentage of students who were enrolled in grades 9 through 12 during a given school year, were not enrolled in school during the following school year, and had not earned a high school diploma or completed a state- or district-approved education program. The NCES calculates an event dropout rate in the following manner: The denominator of the rate is the October 1 membership count for the grades for which the dropout rate is being calculated. For example, the dropout rate for grades 9 through 12 would use a denominator that equals the October 1 enrollment count for grades 9 through 12. The numerator (dropouts) is all individuals who: - were enrolled in school at some time during the previous school year; - were not enrolled on October 1 of the current school year; - have not graduated from high school or completed a state- or district-approved education program; and - do not meet any of the following exclusionary conditions: transferred to another public school district, private school, or state- or district-approved education program; temporary absence due to suspension or school-approved education program; or death. It is important to note that this method does not include individuals outside of the public school system nor individuals who may have dropped out during a preceding school year. For the 2001-2002 school year, NCES was able to calculate rates for 45 states and the District of Columbia (this is the most recent school year for which data have been made available). Five states did not follow the NCES reporting rules that year; consequently, NCES could not calculate a national event dropout rate using the CCD. The Education Sciences Reform Act of 2002 (ESRA) reauthorized the NCES and charged it with collecting, compiling, and disseminating statistics on secondary school completion, among other data. Put simply, the NCES high school completion rate, "is based on CPS [Current Population Survey] data and represents the percentage of 18- through 24-year-olds who are not enrolled in high school and who have earned a high school diploma or equivalent credential, including a GED." The NCES high school completion rate differs from the Title I graduation rate (discussed above) in three key respects: Unlike the Title I-A graduation rate, the NCES completion rate includes all those with a high school credential. That is, whereas the graduation rate stipulated in the NCLBA includes only those obtaining a regular diploma , the high school completion rate includes those obtaining an equivalency certification, such as a district- or state-sponsored General Educational Development (GED) certificate. The NCES completion rate is not restricted to those completing high school in a standard number of years . Rather, it is restricted to those in a specific age group—that is, those 18 to 24 years old—and is simply the proportion of the group who hold a high school credential. Whereas the Title I-A graduation rate is tabulated by each state (from district-reported administrative data), the NCES completion rate is estimated using survey data from a large, nationally-representative sample. In addition to the previously described high school outcomes required by the ESEA and ESRA, NCES has recently begun calculating a fourth high school indicator: the average freshman graduation rate (AFGR).