This report compares Kentucky's reading and mathematics performance on the most recent administrations of the state assessment with performance on the National Assessment of Educational Progress (NAEP). To indicate how Kentucky is doing in narrowing the academic achievement gap between African American, Latino, or low-income students and their white, middle class peers, the report presents NAEP data by race, ethnicity, and family income. The report presents other state-level data on K-college education, including demographic distribution across each educational level, participation and success in Advanced Placement, percentage of students taking high-level courses, school funding gaps, and high school and college graduation rates. In 2002, 60 percent of all 4th graders were proficient or above in reading on the state's assessment, while 29 percent performed at or above the proficient level on the 1998 NAEP 4th grade reading assessment. Significantly more white than African American 4th graders were proficient or above in reading. In 2002, 26 percent of all 8th graders were proficient or above in mathematics on the state assessment, while 21 percent performed at that level on the 2000 NAEP 8th grade mathematics assessment. Significantly more white than African American 8th graders were proficient or above in math. Kentucky had the sixth smallest African American-white 4th grade reading achievement gap in 1998 and the 3rd smallest gap among all states on the 2000 NAEP grade 8 math assessment. African American students are underrepresented in Advanced Placement test taking, while Asian American students take them at high rates. About 37 percent of Kentucky high school students enroll in college, compared to 54 percent nationwide. African American students graduate from the state college at a lower rate than students from other groups. Almost one-third of Kentucky secondary classes are taught by teachers lacking a major or minor in the field. African American students are underrepresented in gifted education programs. Districts with the highest child poverty rates and highest minority enrollments have the most state and local dollars to spend per student. (SM)