Nearly half of the Latino and African American students who should have graduated from California high schools in 2002 failed to complete their education, according to a Harvard University report released Wednesday.
In the Los Angeles Unified School District, the situation was even worse, with just 39% of Latinos and 47% of African Americans graduating, compared with 67% of whites and 77% of Asians.
The report concluded that the public remains largely unaware of the true extent of the problem because the state uses "misleading and inaccurate" methods to report dropout and graduation rates.
The California Department of Education reported that 87% of students graduated in 2002, but researchers pegged the rate at just 71%. Nationally, about 68% of students graduate on time, according to the analysis.
The troubling graduation rates are most alarming in minority communities, where students are more likely to attend what researchers call "dropout factories."
The exodus of tens of thousands of students before 12th grade is exacting significant social and economic costs through higher unemployment, increased crime and billions of dollars in lost revenue, according to the report by researchers from Harvard, Johns Hopkins, UCLA and UC Santa Barbara, among others.
"A diploma is a passport to economic success. If our high schools can't get students the education they need, that will be ... an economic and social problem moving forward into the next generation," said researcher Christopher Swanson of the nonprofit Urban Institute in Washington, which produced data for the report released by Harvard's Civil Rights Project.
Statewide, just 57% of African Americans and 60% of Latinos graduated in 2002, compared with 78% of whites and 84% of Asians, the report said.
Using enrollment data, researchers produced what they believe are the most definitive graduation rates for California and its largest school systems.
They cast aside the state's method, which even California Education Department officials acknowledge is flawed. The state officials say they are forced by the federal government to use a formula that relies on undependable dropout data from schools.
The Harvard report found that African Americans and Latinos in the state were far less likely to graduate than their white and Asian peers, reflecting an achievement gap that first appears in elementary schools.
UCLA researchers noticed one troubling pattern in Los Angeles Unified: Most students who leave high school do so between ninth and 10th grades.
In several Los Angeles high schools, UCLA researcher Julie Mendoza found that less than one-third of ninth-graders graduated on time.
Principals at two of those high schools -- Jefferson and Manual Arts -- said students leave for a number of reasons but that their schools are taking steps to boost graduation rates.
Jefferson High School Principal Norm Morrow attributed his school's graduation rate -- pegged by UCLA at 31% -- partly to a transient student population and overcrowding that leave little opportunity for personal attention.
"If you don't connect with [students], they are going to drop out," said Morrow, who disputed the UCLA graduation figure and put the rate at about 45% last year.
He said that gangs, drugs and students working to support their families also figured into high dropout numbers. Jefferson serves large numbers of students from immigrant Latino families.
To retain more students at the South Los Angeles campus, Morrow said, he has been working on dividing the school of 3,800 students into smaller learning centers.
Manual Arts High School Principal Edward Robillard called the more personalized approach "one of the most powerful tools for inner-city schools to increase graduation."
Administrators created some smaller programs at Manual Arts three years ago. Next year, Robillard said, the 4,200-student school will be broken up into nine academies with about 450 students each.
Los Angeles Unified Schools Supt. Roy Romer said the district is aggressively tackling the graduation problem by dividing large schools into smaller units and by better preparing elementary school students with new reading and math programs.
"We've got to raise performance beginning in elementary school," Romer said. "The problem is severe. It's something we have to cure."
Inaction, researchers said, could prove costly.
UC Santa Barbara education professor Russell Rumberger estimated that the 66,657 dropouts reported by California in 2002-03 could cost the state $14 billion in lost wages over the students' lifetimes, and add 1,225 inmates to state prisons. The real costs could be far higher, he noted, because of the state's underreporting of dropout data.
"There are huge social costs" associated with high dropout rates, including "lower wages, higher unemployment, poorer health, lower tax revenues, increased crime," Rumberger said. "If we are going to make a dent in these problems, we need to start with kids [when they] are little."