This report compares Michigan'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 Michigan 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 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. In 2002, 57 percent of all 4th graders met the moderate or satisfactory state standard in reading, with whites significantly outperforming African Americans. On the 1998 NAEP 4th grade reading assessment, 63 percent of Michigan students performed at the basic level, while 28 percent were at or above the proficient level. In 2002, 54 percent of all 8th graders met or exceeded the state standards in mathematics, with whites significantly outperforming African Americans. On the 2000 NAEP 8th grade mathematics assessment, 69 percent of Michigan students performed at the basic level, while 29 percent were at or above the proficient level. Michigan had the eighth largest African American-white 4th grade reading achievement gap nationwide in 1998 and the second largest African American-white 8th grade mathematics achievement gap in 2000. African Americans are significantly underrepresented in Advanced Placement examination taking and in gifted and talented programs. About 42 percent of Michigan's high school students enroll in college, compared to 54 percent nationwide. One in five Michigan secondary classes are taught by teachers lacking either a major or minor in the field. Districts with higher child poverty rates have fewer state and local dollars to spend per student, while districts with higher minority enrollments have more state and local dollars to spend per student. (SM)