America's graduation rate dilemma
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We have a graduation problem in the U.S. Too many young people, in particular the underprivileged, are failing to get high-school degrees.

Some believe America's education system is reversing that trend. They point to the U.S. Department of Education's announcement in December that graduation rates reached an all-time high. Others believe we are actually going in the wrong direction, that higher graduation rates are the result of lowering standards in order to graduate students in four years. Students may be obtaining degrees, but they are not college- or career-ready, leaving post-secondary institutions with a heavy remediation burden.

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The newly released "Building a Grad Nation" report thrust the high-school graduation debate back to the forefront. According to the report, the primary roadblocks to obtaining a 90 percent graduation rate by 2020 include graduation gaps between subgroups of students (e.g., whites and minorities, and low-income and non-low-income students) and low-graduation-rate high schools. The report found that a disproportionally large percentage, around 50 percent, of the low-graduation-rate high schools nationwide are alternative, charter and virtual schools, despite the fact that they only make up about 14 percent of all high schools and enroll 8 percent of all high-school students.

But dig deeper into how the graduation rate is calculated and other questions emerge: Does the federal government's four-year graduation rate effectively measure school performance, or does it enable schools to pass the buck of failure to others? Is there a better way to measure graduation?

The Every Student Succeeds Act (ESSA) defines a low-graduation-rate high school as a school enrolling 100 or more students with a graduation rate of 67 percent or below. The U.S. Department of Education requires that the graduation rate be calculated by determining how many students graduated four years after entering the ninth grade out of the total number of students who were in the same class cohort. Therefore, only what happens during a student's fourth year of high school impacts the graduation rate for that school. What happens in the ninth, 10th, and 11th grades doesn't matter.

That means some schools are being penalized for non-graduates even though they may not be the primary school that contributed to the student falling behind in the first place. For example, a student could be enrolled in School A for three years, earn no high school credits, and then transfer to School B for his fourth and final year, where he will fail to graduate with his four-year cohort. Under the current graduation rate calculation, School B is penalized for not graduating the student "on time" despite the fact that it only had that student for one of those four years. School A escapes all accountability for failing to progress the student toward graduation. That hardly seems fair.

So just how big of impact could the above scenario have? America's public education system needs schools that take in struggling students who, for whatever reason, failed or dropped out. Parents seeking help for their children rely on these school choice options. Charter, alternative and virtual schools — the very schools that have been classified as "low-graduation-rate high schools" — often serve as schools of last resort for families. They offer students a second chance to obtain a degree. These schools strongly believe in their mission to serve all who come to them regardless of need and no matter the cost.

The last thing we want to do is discourage these schools from helping underserved students graduate at the risk of being labeled low-performing. Nor should any school be able to simply hand off a credit-deficient student to another school a year or two prior to graduation and force that new school to take full responsibility for the non-graduate that was four years in the making. It's a classic example of how regulatory policies can unintentionally create the wrong incentives.

Rather than the four-year cohort model, calculating an annual "progress toward graduation" metric for all schools would be a far more accurate measure of whether or not a school is successfully helping students earn diplomas. According to education researcher John Watson, states need to begin by "defining how a student is determined to be behind, on track, or ahead of pace, at time of enrollment; determining what is appropriate progress towards graduation; and determining incentives to schools for working with students who were behind at time of enrollment and getting them on track to graduate." In other words, measure every student every year, not only in year four.

There is much we need to do to tackle our nation's graduation and dropout challenges. Getting the right metrics in place is a start.

Davis is executive chairman of K12 Inc., a technology-based education company and leading provider of online learning programs to schools across the U.S.