"Our country used to have the world's highest proportion of young people with a college degree -- now we're 16th," Obama said at Washington's Benjamin Banneker Academic High School.
"That's not good enough. And so we need your generation to bring us back to the top. If we do that, you guys will have a brighter future. And so will America," Obama said in his third annual Back-to-School Speech.
The address was broadcast and streamed live to students nationwide.
Banneker is a small, 30-year-old magnet school considered Washington's best public high school because of its strenuous curriculum and Advanced Placement and International Baccalaureate programs.
Its Web site says Banneker is a "No Child Left Behind blue-ribbon school."
Obama announced changes to the Bush-era law last week, letting states seek waivers from what its critics call its most onerous requirements, including the requirement that 100 percent of students test at grade level in reading and math by 2014, which many educators argue is unrealistic.
Obama told the Banneker students excelling academically doesn't have to mean getting straight A's all the time, "although that's a good goal to strive for."
It means "being the best student you can be," setting sights high and taking risks, the president said.
"You've got to wonder, you've got to question, you've got to explore, and every once in a while you need to color outside of the lines. That's what school's for: discovering new passions, acquiring new skills, making use of this incredible time that you have to prepare yourself and give yourself the skills that you're going to need to pursue the kind of careers that you want. …
"But I also want to emphasize this. With all of the challenges that our country faces today, we don't just need you for the future -- we need you now. America needs your passion, your ideas and your energy right at this moment."
He cited three high school students he said made extraordinary accomplishments -- Will Kim of Fremont, Calif., "who launched a non-profit that gives loans to students from low-income schools who want to start their own business"; Jake Bernstein of St. Louis, who launched a Web site with his sister "devoted to community service for young people"; and Amy Chyao from Richardson, Texas, who "discovered a breakthrough process that uses light to kill cancer cells."
Like those three teenagers, "you don't have to wait to make your mark," Obama said.
"A lot of the time, you've got better ideas than the rest of us anyway," Obama said, encouraging students to get those ideas "out in the open, in and out of the classroom."