The National Governors Association's (NGA) Compact on State High School Graduation Data (NGA, July 2005)

All 50 governors have signed NGA's Compact, agreeing to build their states' capacity to collect and report accurate graduation data and to use a common graduation rate definition. The governors agreed to calculate the graduation rate by dividing the number of on-time graduates in a given year by the number of first-time entering ninth graders four years earlier. Graduates are those receiving a high school diploma (not a GED), and states may make modifications for extending the typically expected four-year period in which students are expected to graduate for atypical students (e.g., English language learners and students with disabilities).

The denominator can be adjusted for transfers in and out of the system. This formula follows the spirit of Swanson's CPI index (Swanson provided technical assistance to NGA's task force). NGA reports that, through another program, 30 states have received NGA "Honor States grants," of which implementation of the Graduation Counts Compact is a core requirement—thus requiring states to use the common graduation rate calculation. The compact urges states to create a longitudinal data system to track individual students. The AFT and the NEA were among the participating organizations in the NGA task force that devised the formula (NEA signed onto the compact while the AFT did not).

In August 2006, NGA reported that 13 states will publicly report their 2006 graduation rate using the compact formula. NGA also stated that by 2010, 39 states plan to report a graduation rate using the compact definition. These states are currently gathering the four- to five-years of longitudinal data needed to calculate the rate. Several states are still determining in what year they will report the rate, and North Dakota and South Dakota do not plan to report the rate using the compact definition. Some speculate that fear of increased NCLB accountability might be the reason some states are still using other estimates and have yet to commit fully to using the compact rate by a specific date.