Indiana’s Graduation Rate Doesn’t Add Up

What would you say if the president told you that your tax rate was only 1 percent? Or if your local sheriff went around bragging that your neighborhood is patrolled by 100,000 police officers? You might not know exactly what tax rate you pay or precisely how many police officers patrol your street, but you would know for sure that those numbers were pretty farfetched.

Unfortunately, the Indiana Department of Education gets away with claiming a high school graduation rate that isn’t much more believable. The state claims that its rate is 90.1 percent, but this just isn’t a realistic figure. Using publicly available enrollment figures, we estimate that Indiana’s high school graduation rate is 74 percent.

The state can get away with publishing an unrealistic graduation rate because it’s impossible for anyone to check its calculations directly. The state is supposed to track individual students to see who graduates, who moves out of state and who drops out. But because student records are confidential, nobody can check to see whether the state does a good (or even adequate) job of fulfilling this responsibility.

There are plenty of reasons why Indiana, like many other states, would drastically overstate the percentage of high school students that graduate. For one thing, keeping track of individual students just isn’t the kind of job the school system is designed to do well. For another, the system is under a lot of political pressure to inflate its estimate of the percentage of students who graduate.

Tracking individuals as they move from place to place and change their life arrangements is maddeningly difficult even for the people who run the U.S. Census, and that’s pretty much all they do. For a school whose staff is busy with educating students, the job is all the more frustrating.

This problem is compounded by the perverse political incentives under which the system operates. When the state claims that few kids drop out of school, the voters and taxpayers who support the system are happy. On the other hand, every time the state identifies a student as a dropout, that’s one more piece of bad news for the system.

Small wonder, then, that schools seem to go out of their way not to count students as dropouts. If schools don’t have any information on whether a student left the system because he moved or because he dropped out, they have little incentive to find out. It’s much better for them just to eliminate that student from their calculations, or include him under a heading like "unknown." Students who get a GED or say they intend to get a GED are often counted as high school graduates.

In contrast to these murky procedures, we use a simple method to estimate graduation rates based on publicly available enrolment data. We start with the number of students enrolled in ninth grade, making an adjustment to account for the presence of students repeating ninth grade. Then we look at changes in the total high school student population over the following four years and use this information to calculate how many students from our entering ninth grade class should have graduated four years later if none had dropped out.

By comparing this figure to the actual number of high school diplomas handed out in that year, we produce a reliable estimate of the graduation rate. While Indiana’s official graduation rate of 90.1 percent is based on an unreliable method that outside observers can’t double-check, our estimated graduation rate of 74 percent is a simple calculation based on figures that anyone with a computer can access.

Inflated graduation rates are a nationwide problem. Many states publish an official graduation rate that’s nowhere near the figures our method produces. Even the National Center for Education Statistics, a generally reliable source of education data run by the U.S. Department of Education, claims that the national graduation rate is 86.5 percent. In a new study sponsored by the Bill & Melinda Gates Foundation, we estimate it at only 70 percent.

Indiana’s education officials should wake up and count the dropouts. How can voters make informed decisions about education policy if Indiana makes claims that are so far out of touch with reality?