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Study: High School Grad Rate Highest Since '76

"When I grew up on the South Side of Chicago it wasn't great, but I had lots of friends who dropped out and they could go work in the stockyards or steel mills and they could buy a home, support a family, do OK," Duncan said.

But those jobs are gone and won't come back, he said.

California, the nation's largest public school system by enrollment, led the nation in new graduates in 2010, turning out almost 405,000. It also produced the most dropouts: almost 93,000. That translated to a rate of about 5 percent, above the national average.

During the 2009-10 academic year, some 514,000 students dropped out of high school nationwide. Still, the rate declined from 4 percent during the seven previous academic years, when data was sometimes incomplete or represented averages of states that reported figures.

Nationally, students were most likely to drop out of high school during their senior year, with roughly one in 20 quitting before graduation day. In every state, males were more likely to drop out.

Arizona had the highest dropout rate, at 8 percent, followed by Mississippi at 7 percent. Washington, D.C., schools also posted a 7 percent dropout rate, the Education Department projected based on previous years' reporting.

Mississippi, New Mexico and Wyoming had dropout rates rise more than one percentage point, while Delaware, Illinois and Louisiana saw noticeable decreases. Delaware dropped from about 5 percent to 4 percent. Illinois dropped from roughly 12 percent to 3 percent. And Louisiana dropped from 7 percent to 5 percent.

"The trends are hopeful but our high school dropout rate is still unsustainably high and it's untenable in many of our African-American and Latino communities. We have a long way to go here," Duncan said.

Nationally, white and Asian and Pacific Islander students were among the least likely to leave school without a degree, with only 2 percent dropout rates. Hispanic students posted a 5 percent dropout rate, followed by blacks at 6 percent and American Indians and Alaska Natives at 7 percent.

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