By Ian Simpson
WASHINGTON (Reuters) - An increasing number of high school students are graduating on time but dropouts are still a problem, creating a drag on the economy, according to a report issued on Monday by a nonprofit group.
The high school graduation rate rose to 75.5 percent in 2009 from 72 percent in 2001, said the report by the Everyone Graduates Center at Johns Hopkins University. That rate is well below the goal of 90 percent graduation by 2020.
The number of "dropout factories," or high schools where at least 60 percent of students fail to graduate on time, dropped to 1,550 in 2010 from 2,007 in 2002.
"Although some states and school districts show that the dropout rate can be solved, other states and districts are lagging, with 10 states having lower high school graduation rates recently compared to earlier in the decade," said the report.
The Everyone Graduates Center produced the "Building a Grad Nation" report along with Civic Enterprises, Alliance for Excellent Education and America's Promise Alliance, a nonprofit headed by former Secretary of State Colin Powell and his wife Alma. The groups have been tracking graduation rates since 2002.
Wisconsin was the only state to have reached the 2020 goal of 90 percent graduation. Vermont was close behind.
12 WITH BIG GAINS
Progress in graduation rates was driven by major gains in 12 states: New York, Tennessee, Florida, Georgia, North Carolina, Texas, South Carolina, Missouri, Alabama, Massachusetts, Wisconsin and Kentucky.
The laggards were Arizona, Arkansas, California, Connecticut, New Jersey, Nebraska, New Mexico, Nevada, Rhode Island and Utah. All had lower graduation rates in 2009 than in 2002.
Cutting the dropout rate would boost the economy since moving just one student from dropout status would yield more than $200,000 in higher tax revenues and lower government expenditures over his or her lifetime, the report said.
Graduates earn on average $130,000 more over their lives than dropouts, it said.
"Graduating half of one class of dropouts would save the taxpayer $45 billion in that year," the report said.
Researchers found graduation varied by race, with 91.8 percent of Asian students, 82 percent of whites, 65.9 percent of Hispanics and 63.5 percent of blacks graduating on time.
Ways to improve graduation rates include sharply increasing the number of students who read with proficiency at fourth grade, now at just more than a third of students.
The report also called for reducing absenteeism, redesigning middle schools to foster student engagement, monitoring students for early dropout signs and raising the compulsory school attendance age.
(Editing by Daniel Trotta and Eric Walsh)