Federal 
Regulating How Drop-Out Rates Are Reported:
The tip of the iceberg of a persistent information quality problem
1 Apr 2008 in Information Quality
Department of Education secretary Margaret Spellings has announced a new regulation to control how states report drop-out rates. Under existing law, the states have the discretion to devise their own formulas. This makes interstate comparisons problematic. It also reflects the states' interest in devising formulae that under-report actual drop-out rates.
Under the proposed rule, all states would have to use the same federally prescribed formula.
Sam Dillon reports in the New York Times:
The adoption of a federal graduation formula would correct one of the most glaring weaknesses of the federal No Child Left Behind law. Although the law requires states and high schools to report their graduation rates to the federal government, it allows states to set their own formulas for calculating them. As a result, most states have used formulas that understate the number of dropouts, and official graduation rates are not comparable from state to state. The No Child law establishes no national school completion goal.
The existing federal regulation delegates to the states the discretion to invent the standards by which they will be held accountable. State definitions vary, but in general they appear to be consistently less stringent than the federal definition (PDF, Appendix C). The proposed rule to close this loophole will be published in the Federal Register for public comment.
States have strong incentives to devise accountability measures that make them appear to be performing better than they actually are. Dropout rates (data file links) are but the tip of the iceberg, however. States also devise their own educational performance standards, and research has shown that they consistently report higher levels of academic proficiency than have been observed on the National Assessment of Educational Progress, a standardized national test immune to interstate variations in definitions. Moreover, many states report rising rates of proficiency when NAEP results show rates flat or declining.
Discrepancies such as these are obvious information quality problems. Data that are biased are always difficult to interpret. When they are purposefully biased -- a reasonable inference given the consistent pattern of state-calculated proficiency rates significantly exceeding NAEP rates -- interpretation is impossible.
34 CFR Part 200 (excerpts)
§ 200.1 State responsibilities for developing challenging academic standards.
(a) Academic standards in general. A State must develop challenging academic content and student academic achievement standards that will be used by the State, its local educational agencies (LEAs), and its schools to carry out subpart A of this part. These academic standards must—
(1) Be the same academic content and academic achievement standards that the State applies to all public schools and public school students in the State, including the public schools and public school students served under subpart A of this part, except as provided in paragraphs (d) and (e) of this section, which apply only to the State's academic achievement standards;
(2) Include the same knowledge and skills expected of all students and the same levels of achievement expected of all students, except as provided in paragraphs (d) and (e) of this section; and
(3) Include at least mathematics, reading/language arts, and, beginning in the 2005–2006 school year, science, and may include other subjects determined by the State.
...
(d) Alternate academic achievement standards. For students under section 602(3) of the Individuals with Disabilities Education Act with the most significant cognitive disabilities who take an alternate assessment, a State may, through a documented and validated standards-setting process, define alternate academic achievement standards, provided those standards—(2) Include the same knowledge and skills expected of all students and the same levels of achievement expected of all students, except as provided in paragraphs (d) and (e) of this section; and
(3) Include at least mathematics, reading/language arts, and, beginning in the 2005–2006 school year, science, and may include other subjects determined by the State.
...
(1) Are aligned with the State's academic content standards;
(2) Promote access to the general curriculum; and
(3) Reflect professional judgment of the highest achievement standards possible.
(i) Are aligned with the State's academic content standards for the grade in which the student is enrolled;
(ii) Are challenging for eligible students, but may be less difficult than the grade-level academic achievement standards under paragraph (c) of this section;
(iii) Include at least three achievement levels; and
(iv) Are developed through a documented and validated standards-setting process that includes broad stakeholder input, including persons knowledgeable about the State's academic content standards and experienced in standards setting and special educators who are most knowledgeable about students with disabilities.
(ii) Are challenging for eligible students, but may be less difficult than the grade-level academic achievement standards under paragraph (c) of this section;
(iii) Include at least three achievement levels; and
(iv) Are developed through a documented and validated standards-setting process that includes broad stakeholder input, including persons knowledgeable about the State's academic content standards and experienced in standards setting and special educators who are most knowledgeable about students with disabilities.
(2) In the guidelines that a State establishes under paragraph (f)(1) of this section, the State must include criteria for IEP teams to use in determining which students with disabilities are eligible to be assessed based on modified academic achievement standards. Those criteria must include, but are not limited to, each of the following:
(i) The student's disability has precluded the student from achieving grade-level proficiency, as demonstrated by such objective evidence as the student's performance on—
(ii)(A) The student's progress to date in response to appropriate instruction, including special education and related services designed to address the student's individual needs, is such that, even if significant growth occurs, the IEP team is reasonably certain that the student will not achieve grade-level proficiency within the year covered by the student's IEP.
(iii) If the student's IEP includes goals for a subject assessed under §200.2, those goals must be based on the academic content standards for the grade in which the student is enrolled, consistent with paragraph (f)(2) of this section.
(A) The State's assessments described in §200.2; or
(B) Other assessments that can validly document academic achievement.
(B) Other assessments that can validly document academic achievement.
(ii)(A) The student's progress to date in response to appropriate instruction, including special education and related services designed to address the student's individual needs, is such that, even if significant growth occurs, the IEP team is reasonably certain that the student will not achieve grade-level proficiency within the year covered by the student's IEP.
(B) The determination of the student's progress must be based on multiple measurements, over a period of time, that are valid for the subjects being assessed.
(iii) If the student's IEP includes goals for a subject assessed under §200.2, those goals must be based on the academic content standards for the grade in which the student is enrolled, consistent with paragraph (f)(2) of this section.
