Despite decades of reform attempts and billions of dollars of investment, the American education system badly "needs improvement," reports CBS News Correspondent Russ Mitchell.
"It's not where it needs to be," said Andy Rotherham, co-founder of Education Sector, an education think tank. "There are too many places that aren't doing well."
The report card shows that only 34 percent of 8th graders are proficient in math, 29 percent in science and 33 percent in reading. Compared to other countries, American students score near the bottom - 21st out of 30 in science. It's even more bleak in math - they're 25th.
Americans are also giving the nation's public school system poor grades, a newly-released CBS News survey finds, with 70 percent offering marks of C, D or F.
Those in the trenches like Washington, D.C., school Chancellor Michelle Rhee say the reason isn't the kids - it's the system.
"In society there is not a particularly high regard for education," Rhee said.
The problem, educators say, is that our most talented minds head into medicine, law and technology. A teaching career is often an afterthought, given the salary.
An average elementary school teacher earns $50,000 a year. Physicians average a hundred thousand more.
Another problem is what kids are learning. Unlike most other countries that have national standards of what to teach, in the U.S., it's a state-by-state decision.
"These districts often face enormous management challenges," Rotherham said.
He said in many states, the standards are low.
"We had a public school system that served us very well in the 20th century, when the United States had an economy based on building things and moving things around," Rotherham said. "The economy has changed."
Then there's the politics of education. Tenure and unions protect even bad teachers, and with limited funds, there's always a budget battle. More money for a successful charter school, for instance, means less for public schools.
"Too often people think, everyone in education is just all about the kids," Rotherham said. "But it's an industry like any other where you have a variety of interests."
The end result: Only 70 percent of kids in this country graduate on time. In the District of Columbia, it's more like half, and it's not because the school system doesn't have any money.
"We spend more money per child than almost any other jurisdiction in this country and yet our outcomes are at the absolute bottom," Rhee said.
But Rhee thinks she may have one solution for reforming education: Treat it like any other business. Make educators accountable for their successes and failures. If you don't succeed as a principal or teacher, she wants you out.
When she arrived two and a half years ago, she inherited schools like Sousa Middle.
"It was out of control," Rhee said. "I mean, there were more children in the hallway than in classroom, all the kids had hoods on, had their earphones in, swearing at teachers."
Rhee removed the former principal and installed Dwan Jordon.
They fired 11 of 31 teachers, instituted school uniforms and Saturday school. Last year's test scores were up double-digits: 25 percent in math, 17 percent in reading.
"The kids love the school; they love being here," Jordan said. "Today our attendance rate is 98 percent."
Rhee says Sousa is the model but adds too many principals are not willing to change the status quo.
"They are, as a group, incredibly conflict-averse," Rhee said. "They just don't want people to yell at them."
So she says they keep ineffective people in the pipeline rather than putting them on notice.
The teachers union disagrees with Rhee's philosophy, saying there are already methods in place to deal with bad teachers and that tenure and other protections shouldn't be ignored.
"I get yelled at all the time," Rhee said. "People are picketing outside the office. You know, they're writing in, calling in, saying she's the worst thing that ever happened."
"It sounds like it's also a battle every day," Mitchell said.
"It is; it is absolutely," Rhee said.
But Harvard University, where Rhee got her master's degree, agrees that the key to reforming education starts at the top. This fall it will offer its first new doctoral program in 74 years in education leadership.
"What we want is to recognize that education is a business," Dean Kathy McCarthy said. "So leaders need not only a background in the education sector, but also a background in management."
The Harvard program is all about management, taught in part by professors at the business school. Harry Spence is the co-director of the program.
"Increasingly, principals are people who are really strong instructionally," Spence said. "They move into the principalship, and they're managing a complex environment. Nobody has taught them how to do that."
So Harvard will by immersing students in budgets and conflict resolution.
Because Harvard wants to attract students who would normally be swayed by higher paying careers, the program is totally free. More than 1,000 people have applied for just 25 slots.
"I think there's a real hope that in 10 years you'd see our graduates in senior roles and organizations that are making a real difference," Spence said.
If they're right, school systems will end up with better leaders who hire better teachers, and American students may finally make the grade.