High School Dropouts Costly for American Economy

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In our "Where America Stands" series, CBS News is looking at a broad spectrum of issues facing the country in the new decade.

Sarae White is an all-too-typical student in Philadelphia -- she stopped going to school last year, and was on her way to becoming one more dropout.

"The teachers didn't care, the students didn't care," White said. "Nobody cared, so why should I?"

In Philadelphia, the country's sixth largest school district, about one of every three students fails to graduate -- about the national average. CBS News correspondent Bill Whitaker reports that of the 4 million students who enter high school every year, one million of them will drop out before graduation. That's 7,000 every school day -- one dropout every 26 seconds.

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Michael Piscal, Headmaster of View Park Prep Charter School in Los Angeles said, "It's not working for teachers, it's not working for students -- it's not working for society.

The dropout problem is even worse in big cities. Almost half of all students in the country's 50 largest school districts fail to get a high school diploma. Thirty years ago the United States led the world in high school graduation. Today we rank 18th among industrial nations. Besides the intrinsic value of education itself, when Americans lack an education it hurts us all -- in the wallet.

Dropouts cost taxpayers more than $8 billion annually in public assistance programs like food stamps. High school dropouts earn about $10 thousand less a year than workers with diplomas. That's $300 billion in lost earnings every year. They're more likely to be unemployed: 15 percent are out of work versus a national average of 9.4 percent. They also are more likely to be incarcerated. Almost 60 percent of federal inmates are high school drop outs.

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"You have high schools in Los Angeles that send more kids to prison, than they graduate from college," Piscal said. "It's time for a radical, radical change."

Piscal has found a solution. The former English teacher at the most rigorous private school in Los Angeles opened View Park Prep 15 years ago, bringing the private school's curriculum to one of south L.A.'s toughest neighborhoods.

"What's best for the rich kids is best for all kids," he said.

At the local public schools, more than 50 percent of students drop out. Not at View Park. These are the same kids as in the public schools - they're admitted by lottery. But here everything is geared toward getting to and succeeding in college.

The curriculum is focused on building college-level study habits and writing skills. Starting in 6th grade, analytical writing is required in every course, even math and science. The average class size is 18, roughly half the size of public schools. Teachers are available after hours for any student needing help.

Meanwhile, back in Philadelphia, another solution emerges -- an early warning system. Starting in 6th grade at-risk students are identified. For those who've already dropped out - there's a re-engagement center to help them drop back in.

A recent report found that Philadelphia improved its graduation rate by 23 percent, that's more than any other city.

For Sarae White, small classes and an accelerated program proved the perfect fit.

"I think that's why most kids are here," White said. "They need somebody to grab their hand and pull them up.

Sarae wants to go to art school after graduation. She painted a mural with the word "hope" in it - as a gift to her new school.

For the first time in decades that word "hope" can be applied to America's dropout problem.