According to the Alliance for Excellent Education (AEE), nationally one-third of students, 1.3 million each year, fail to graduate. The AEE suggests that these low rates have for too long been "obscured... by inadequate accountability systems at state and federal levels." Montana's accountability system is a case in point. Dependent on reporting by each school and lacking an ability to account for all students statewide, Montana's dropout and graduation rates were often incomplete and inaccurate. The advent of a statewide student information system using data verified and cleansed at the state and local levels has brought about a change in the accuracy and reliability of Montana's dropout data. This report reflects the second year of collecting and verifying data using AIM (Achievement in Montana). Data from last year's 2007-2008 dropout report showed a sharp increase of dropout rates. Completion rates declined slightly but increased for American Indian students. What would the second year hold? In this report for 2008-2009, the number of dropouts decreased slightly for all students and the dropout rate stayed the same relative to last year. Dropout rates also stayed the same, with a slight increase in raw numbers, for grades 7 and 8 students. The high school dropout rate decreased by 0.1 percent from last year. More males than females dropped out and the grade 12 continues to have the highest dropout rates. The gap between male and female dropout rates is widening with a gap of 0.5 percent last year and a gap of 0.7 percent this year. American Indian students experienced an increase in their dropout rates. In particular, the dropout rate for American Indian student females increased sharply from last year, an increase of 1.2 percentage points for high school students. American Indian students experience the highest dropout rates in the 9th grade and drop out more often in the state's largest schools than at smaller schools on or near a reservation. White students decreased their dropout numbers and rate from last year; however, they now make up a larger share of the grades 7 and 8 dropouts than ever before. For school year 2008-09, the calculation of the completion and graduation rate includes two years of student-level data from AIM. Rates for all student groups decreased compared to 2007-08 data. The completion rate for the Class of 2008 was 84.2 percent compared to a rate of 81.9 percent for the Class of 2009. The graduation rate was 82.6 percent for the Class of 2008 compared to a rate of 80.7 percent for the Class of 2009. An appendix is included. (Contains 9 tables, 14 figures and 5 online resources.) [This report was prepared by the Office of Public Instruction, Measurement & Accountability Division.]