This report compares Indiana'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 Indiana 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 Indiana's 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. Data from 2001 show that 66 percent of all Indiana 3rd graders were above the state standard in English/Language Arts, with significantly more white than African American 3rd graders performing at or above the state English language arts standard. Indiana did not participate in the 1998 NAEP 4th grade reading assessment. The 2001 data show that 66 percent of all Indiana 8th graders were above the state mathematics standard, with white students far outperforming African American students. On the 2000 NAEP 8th grade mathematics assessment, 76 percent of Indiana 8th graders scored at the basic level or above, while 31 percent performed at or above the proficient level. Indiana had the fifth smallest African American-white achievement gap on the 2000 NAEP grade 8 math assessment. African American students are underrepresented in Advanced Placement (AP) exam taking, while Asian American students take AP exams in extremely high numbers. About 43 percent of Indiana's high school students enroll in college, compared to 54 percent nationwide. One in eight Indiana secondary classes are taught by teachers lacking a major or minor in the field. African American students are overrepresented in special education and underrepresented in gifted education. Districts with higher child poverty rates have fewer state and local dollars to spend per student than districts with lower poverty rates, while districts with higher minority enrollments have more dollars to spend than districts with lower minority enrollments. (SM)