The report, released Tuesday by Gen. Colin Powell's America's Promise Alliance, said the United States has the ability to end what it calls an epidemic of high school dropouts.
America's Promise Alliance said it is partnering with Civic Enterprises and John Hopkins University's Everyone Graduates Center to develop and advance a "Civic Marshall Plan" to build a national of graduates.
"Building a Grad Nation: Progress and Challenge in Ending the High School Dropout Epidemic" said the country is seeing the first positive signs of progress in reducing the number of students who leave high school without a diploma.
Nationwide, the number of "dropout factory" high schools fell by 13 percent from 2,007 in 2002 to 1,746 in 2008, the report said.
The report highlights four case studies of success where graduation rates improved at high schools in Tennessee, Alabama, Richmond, Indiana and New York City.
America's Promise Alliance, chaired by Gen. Powell's wife, Alma, is a cross-sector partnership of more than 400 corporations, non-profits, faith-based organizations and advocacy groups dedicated to improving the lives of children.