President Obama is hoping drastic measures and cash will turn around the nation's school dropout rate.  Mr. Obama pledged $900 million in grants to states and school districts to combat the growing numbers.  The President said in a speech Monday to a youth-oriented group chaired by former Secretary of State Colin Powell, principals could be replaced in low-performing schools if things don't turn change. The President offered new strategies to help end the dropout crisis. Measures that might seem drastic to some, but effective to the President. "Strategies like closing a school for a time and reopening it under new management," Mr. Obama said at the America's Promise Alliance speech, "or even shutting it down entirely and sending its students to a better school." While the President admits replacing staff should be a last resort, he also says "if a school continues to fail its students year after year after year, if it doesn't show signs of improvement, then there's got to be a sense of accountability."

The White House shows statistics indicating 1.2 million students drop out of school each year and only 70 percent of entering high school freshman go on to graduate.  The President's Director of Domestic Policy Council says the these numbers are alarming.  "Right now, we've got 7,000 kids every day dropping out of school," Melody Barnes told Fox News Senior White House Correspondent Major Garrett. "Our country can't afford that."

The President pointed to the current economic crisis as a reason for students to stay in school. "In fact, during this recession," Mr. Obama said, "a high school dropout has been more than three times as likely to be out of work as someone with at least a college degree."

In order to be eligible for a School Turnaround grant, school districts need to decide which model they will use on low performing schools.

  • Turnaround model - replaces the principal and half the school staff
  • Restart model - closes the failing school and re-opens it under a charter school format
  • School closure - close the failing school and re-enroll students in another more successful school
  • Transformational model - replaces principal; implements comprehensive instructional reform; creates a community oriented school and provides operating flexibility and support

States will need to identify high schools with graduation rates below 60 percent. The President says this small group of about 2,000 schools in the country are not performing well and turn out half of all the dropout rates. Schools in cities like Detroit, Indianapolis and Baltimore where graduation rates hover around 30 or 40 percent.  Melody Barnes says schools require a lot to turn themselves around.  "It involves parental involvement but it also involves making sure that our schools, our lowest performing schools, have all the resources that they need so that they can focus on our kids."

President Obama says it's not just about students getting a diploma, but schools "should make sure students graduate ready for college, ready for a career, and ready for life." According to the President, students shouldn't just show up order to graduate but they should work in the classroom and stay out of trouble. "Education isn't a passive activity; it's an active one."

The $900 million is part of the President's 2011 budget proposal which still needs to be approved by Congress.