The U.S. high school graduation rate has increased for the first time in 40 years.

Higher standards, better data use, and more parent engagement are among the strategies responsible for the first significant improvement in America’s high school graduation rate in 40 years, a new report suggests.

America’s Promise Alliance, Civic Enterprises, and Johns Hopkins University’s Everyone Graduates Center banded together to release the report, titled “Building a Grad Nation: Progress and Challenge in Ending the High School Dropout Epidemic.”

The graduation rate of U.S. high school students increased from 72 percent in 2002 to 75 percent in 2008, according to the new data. The report also says there has been a decline in the number of “dropout factories,” or schools in which the graduation rate is at or below 50 percent. Dropout factories only make up about 10 percent of all U.S. high schools but account for half of the country’s dropouts. There were 261 fewer dropout factories in 2008 than there were in 2002—a decrease of about 13 percent, according to the report.

While these numbers make educators hopeful, the increase is not at the rate needed for graduation goals set forth in “A Nation at Risk” in 1983. The 1983 report set the objective of having 90 percent of students graduate from high school and obtain at least one year of postsecondary schooling or training by 2020.

Twelve states had substantial increases in their graduation rate between 2002 and 2008, with Tennessee topping the list with a gain of 15 percent. Tennessee’s graduation rate increased from 60 to 75 percent, and the state also eliminated 24 dropout factories. The southern states experienced the most increase in graduation rates as a region, while also cutting the greatest number of dropout factories. Only three states—Arizona, Utah, and Nevada—experienced significant increases in high school dropouts.

The report also found that while Asian students have a 91-percent graduation rate and white students have an 81-percent graduation rate, black, Native American, and Hispanic students disproportionately drop out, and graduation rates for students in those groups remain in the low 60s. If the country was able to cut dropout rates for minority students in major cities in half, the nation would save $2.3 billion in an average year, create 17,450 jobs, and increase tax revenues by $249.7 million, the report says—all on the basis of one high school class.

States also are working to increase the reasons to stay in school. Twelve states have raised the compulsory school age since 2002, from 16 to 17 or 18. In Tennessee and West Virginia, students must remain in school until they are 18 in order to retain their driver’s license.

The report includes a Civic Marshall Plan that sets forth strategies and benchmarks to ensure that the nation’s high school graduation rate increases more quickly. To build state and district abilities to reduce their dropout rates, it creates standards to build early warning systems and appropriate interventions; create a multi-sector and community-based effort; enhance high school and college graduation rate data; develop new education options based on student and community needs and interests; develop parent engagement strategies; elicit perspectives of students, educators, and parents; and reauthorize the Elementary and Secondary Education Act.