Obama challenged states to name names -- high schools with graduation rates below 60 percent -- and discussed the administration's investment to help turn the schools around.
The president spoke at an America's Promise Alliance GradNation event conducted by the Alliance's founding chairman, Colin Powell, and his wife, Alma.
Obama proposed $900 million for the Schools Turnaround Grant program, a tough-love plan that would make federal grants available to states and school districts that agree to turn around or possibly close 2,000 schools producing more than half of the nation's dropouts.
The administration has committed $3.5 billion for changes in America's persistently low-performing schools, the White House said in a fact sheet.
"We know that the success of every American will be tied more closely than ever before to the level of education that they achieve," Obama said. "The jobs will go to the people with the knowledge and the skills to do them. It's that simple."
Obama announced an effort to invest $100 million in a College Pathways program that would promote a college-readiness culture in high schools through programs allowing students to earn a high school diploma and college credit simultaneously.
"Graduating from high school is an economic imperative," Obama said. "That might be the best reason to get a diploma, but it isn't the only reason ... ."
Among the proposals in the turnaround program is one in which a failing school would have to replace its principal and at least half of its staff and another that would close a school and enroll students in other higher-achieving schools.
Obama said dropout rates are "a problem we can't afford to accept or ignore."