This report describes court challenges to high school exit exams for students with disabilities, explores the legal and public policy issues, and discusses implications for educators. Legal challenges include claims brought under the Due Process and Equal Protection clauses of the Fourteenth Amendment, and under disability statutes, including the mandate for a free appropriate public education, the requirement that a sole criterion not determine an appropriate education program, the need to provide reasonable accommodations and/or alternate assessments, and the decision to provide alternate exit documents. Analysis of case law indicates policymakers should consider: (1) the denial of a diploma to students with disabilities has a negative effect on future educational and occupational attainment; (2) decisions about assessment participation should be made by the Individualized Education Program (IEP) team; (3) students with disabilities must receive adequate notification of the testing requirement and date to enable IEPs to include material being tested; (4) students with disabilities must be afforded the opportunity to learn the material on all exit exams; (5) students with disabilities must receive appropriate accommodations on exit exams; and (6) if an exit exam is not appropriate, with reasonable accommodations, the student must receive an alternate assessment. (Contains 31 references.) (CR)