This document presents the Educational Excellence Network's third annual report card on the progress of education reform in the United States. Despite much activity, the report assigns reform efforts for 1995-96 the overall grade of C, which is the same grade given for the previous year. Part 1 presents data on academic achievement in American public schools and takes the position that dismal academic performance is the result of innercity schools, the mediocrity of many public schools, and the lack of suitable challenge and expectations for students. Part 2 distinguishes between "content" standards and "performance" standards and discusses problems in setting consistent standards and determining real accountability. The third part differentiates between "systemic reform" (in which federal or state governments set standards and shoulder primary responsibility for orchestrating implementation) and "reinvention" (in which the delivery of public education is opened up to a wide array of providers), and provides a rationale for the reinvention model. The discussion describes progress made in the charter-school, contract-management, and school-choice movements. Part 4 indicates that pedagogical dogma excludes practices that are teacher-directed or that involve direct instruction. The whole-language approach in California, the standards proposed by the National Council of Teachers of Mathematics, and "natural" learning are offered as examples of instructional approaches that shut out "instructivism" programs. The final chapter expresses the opinion that the current federal role in education is archaic, that the federal government subsidizes complacent establishment interests rather than those of consumers and reformers, and that the federal government buttresses educational dogmas that are often politically motivated and frequently at odds with the concerns of parents and communities. (Contains 34 references.) (LMI)