This state report card is derived from "Measuring Up 2004," the national report card for higher education. Its purpose is to provide the public and policymakers with information to assess and improve postsecondary education in each state. "Measuring Up 2004" is the third in a series of biennial report cards. The report card grades states in six overall performance categories: (1) Preparation: How adequately are students in each state being prepared for education and training beyond high school?; (2) Participation: Do state residents have sufficient opportunities to enroll in education and training beyond high school?; (3) Affordability: How affordable is higher education for students and their families?; (4) Completion: Do students make progress toward and complete their certificates and degrees in a timely manner?; (5) Benefits: What benefits does the state receive as a result of having a highly educated population?; and (6) Learning: What is known about student learning as a result of education and training beyond high school? This state report card begins by summarizing the state's performance today compared with ten years ago, and by presenting key policy questions that these results suggest for the state. Next, the state's performance in each category is described in greater detail, followed by additional contextual information. Findings for Kentucky include: (1) Despite substantial improvement over the past decade, Kentucky continues to lag behind most other states in preparing students to succeed in college. This year Kentucky receives a C- in preparation; (2) Over the past decade, Kentucky has shown improvement in enrolling students in higher education. Kentucky receives a B- in participation this year; (3) Like many states, Kentucky has made no notable progress in providing affordable higher education opportunities over the past decade. This year Kentucky receives a D- in affordability; (4) Over the past decade, Kentucky has improved substantially in the proportion of students earning a certificate or degree in a timely manner. Despite that improvement, Kentucky receives a C in completion this year; (5) Over the past decade, Kentucky has seen notable increases in the benefits to the state from having a more highly educated population. Kentucky earns a B in benefits this year; and (6) Higher education reforms are starting to show results in Kentucky, especially at the two-year level, but the state still has a long way to go. On literacy measures, residents perform well below the national average. Above-average proportions of college graduates appear to be prepared for licensed technical careers or professions, while below-average proportions appear ready for further graduate study. Graduates of two-year colleges score above average on direct measures of student learning, while graduates of four-year institutions are less competitive. [For "Measuring Up 2004: The National Report Card on Higher Education," see ED508096.]