Every May, hundreds of thousands of Texas high school seniors don caps and gowns to celebrate an academic rite of passage: high school graduation. Texas' youth face a rapidly changing world, one increasingly dependent upon education as the cornerstone for economic success. Without the skills to succeed in the nation's new economy, students who leave without a diploma face a lifetime of limited opportunities and low earnings. The variety of ways that the dropout rate is calculated has generated controversy over the last several years, both in Texas and the United States. Using the most recent data available, this document provides an overview of how the dropout rate is measured in Texas, as well as data on who is dropping out and why. The costs and benefits of keeping dropouts in school are also examined. (Contains 52 endnotes.) [This report was produced by the Center for Public Policy Priorities.]