Background:

A 2007 report entitled The Costs and Benefits of an Excellent Education for All of America’s Children found that the benefit to taxpayers of a prevented dropout, over the adult working lifetime of the individual, has a present value of approximately $236,000 in 2009 dollars. This represents a savings of public expense of approximately $10,500 per year for that individual.

There are a number of ways to represent high school dropout and graduation rates. According to the Office of the Superintendent of Public Instruction (OSPI), in the 2008-09 school year:

An average of 5.1 percent of students in each of grades 9 through 12 drop out each year.
Annual drop-out rates are higher for 12th grade students (8.1 percent) than for 9th grade students (3.6 percent).
For the class of 2009, 73.5 percent of students graduated with a high school diploma within four years of entering high school.
If students who took longer than four years to earn a diploma are included, the extended graduation rate for the class of 2009 was 79.2 percent.
There are significant differences in dropout and graduation rates across groups of students and across school districts.

The Building Bridges Dropout Prevention and Intervention Program has provided state grants to local consortia of high schools and community-based organizations. An evaluation of the grant projects in 2009 found that key interim measures associated with reduced dropout rates include:

increased earned credits towards graduation;
increase in the percentage of students on track for on-time graduation; and
reduction in school risk behaviors (suspensions).

In 2009 the K-12 Data Governance group was established to develop policies, protocols, and definitions for collecting data from school districts and for adding new collection requirements through the student information system.

Summary of Bill:

The Pay for Actual Student Success Program (PASS) is created to provide an annual financial award for high schools that demonstrate improvement in dropout prevention indicators, including those that lead to increased graduation rates.

Dropout Prevention Indicators. The OSPI, in consultation with the State Board of Education, must annually calculate the following for each high school:

the extended graduation rate, which may be statistically adjusted for student demographics in the school;
the proportion of students at grade level, calculated based on earned credits and using a standard definition;
the proportion of students who are suspended or expelled, not including in-school suspensions; and
beginning in 2012-13, a student attendance measure, using an indicator adopted by the OSPI and a standard definition of a student absence.

The OSPI may add indicators to the list, but must rely on data collected through the student information system to the maximum extent possible. The K-12 Data Governance group must establish parameters for collection of student attendance data and student discipline data. School districts must submit attendance and discipline data for high school students for purposes of the PASS beginning in 2012-13.

Performance Metric. The OSPI must develop a metric for measuring performance on the dropout prevention indicators that assigns points and results in a dropout prevention score. The score must be weighted so that no high school qualifies for an award without an increase in its extended graduation rate. The OSPI may establish a minimum level of improvement to qualify for a PASS award.

Award. Subject to funds appropriated for this purpose, each year beginning in the 2011-12 school year, a high school that demonstrates improvement in its dropout prevention score compared to a baseline year is eligible to receive a PASS award. The award amount is determined by the OSPI based on appropriated funds and eligible high schools. The Legislature's intent is to provide an award commensurate with the degree of improvement and the size of the school. A minimum award amount may be established. It is also the Legislature's intent to recognize continuous improvement by using a baseline year for calculating scores, so that a school retains previously earned award funds from one year to the next.

Use of Award. Half of the award is allocated to the high school, and half is allocated to the school district. Award funds must be used on specified activities and can be offered directly by the school or district or under contract with education agencies or community-based organizations. Activities include strategies to close the achievement gap, graduation coaches, comprehensive guidance and planning programs, parent engagement activities, dropout early warning data systems, and early learning programs for pre-kindergarten students.

Award recipients are encouraged to implement dropout prevention and reengagement strategies in a comprehensive and systematic manner. Graduation coaches are defined as staff assigned to identify and provide specified early intervention services to students who have dropped out or are at risk of dropping out of school or not graduating on time.

Support and Accountability. The OSPI regularly informs schools about the PASS and the activities likely to increase the PASS awards. Within available funds, the OSPI develops strategies for identifying and disseminating successful programs and may offer support and assistance through regional networks. Award funds may be withheld if the OSPI finds that schools or districts have willfully manipulated their dropout prevention indicators.