In 2001, Kentucky instituted a placement policy mandating that all students entering undergraduate programs at public institutions who received a score of 17 or below on ACT subject exams in math, English or reading be placed in developmental coursework or receive supplemental help in those subjects. This study examines the public postsecondary entering class of 2004 and follows them through their first two years of postsecondary study, examining the extent and effectiveness of developmental programs at Kentucky's public colleges and universities. The report is based on descriptive statistics about the students who entered Kentucky's public two- and four-year institutions in the summer or fall of 2004 as full- or part-time students seeking degrees or other credentials, and for whom CPE received the ACT, SAT, or standardized on-campus placement exam scores needed to classify their preparation level. A total of 26,087 students who entered Kentucky's public colleges and universities in 2004 are included in this study. (Contains 22 tables and 5 figures.)