Solving America's dropout crisis requires immediate, drastic action. Intractable as the dropout problem may seem, recognition of its magnitude has created an environment ripe for action. Most notably, federal regulations adopted in 2008 require states to use more accurate ways of counting dropouts and holding districts and schools more accountable for improving results. In addition, encouraging developments over the past decade have put major improvement within reach: better data collection and analysis; promising research showing that a small set of school-based variables are highly effective in predicting future dropouts; and pioneering prevention and recovery strategies in cities with the highest concentrations of dropouts. Ideally, policymakers and educational leaders in every state will draw on these developments to design and implement comprehensive approaches to improving graduation rates. This paper helps states take the crucial first step: evaluating each state's dropout prevention and recovery policies to determine how well they support innovation for better student outcomes. This report identifies six model policy elements that frame a sound legislative strategy for dropout prevention and recovery, and it assesses the extent to which recent state policy aligns with these model elements. Overall, 36 states and the District of Columbia have enacted new dropout legislation since 2002. While some states have moved toward adopting comprehensive dropout prevention and recovery policies, nearly all of them have a long way to go. Nearly one-third of the nation--14 states--have enacted no new laws aimed at increasing graduation rates in the past eight years. Methodology is appended. (Contains 25 endnotes.)