Attendant upon the call of Bedlam, and totally (!) coincidental to it, I was just listening to a discussion of this story on the local NPR affiliate.
It seems that, even in Greater Houston (although its a nationwide phenomenon), public schools are sending their likeliest dropouts off to private schools where, for a small sum (as private school tuition goes, it's free! Believe me, I know) one can take a few tests and be guauranteed a high school diploma.
Of course, these diplomas aren't worth the paper they're printed on, but because home-larnin' is a big thang here in the Lone Star State (at least) Texas state universities are forbidden by law from discriminating against these uneducated yutes who deserve as much consideration for their attempt to learn as any home-schooled young-un. And nobody's gonna make a home school get accredited, by cracky! (which is a whole different kettle of crazy, but there you are....)
This only means that when the wholly uneducated get to any school at all (and this begins to explain some of the students I've seen over the years), they are hopelessly out of their depth and will fail out soonest, after parting with considerably more coin than they paid for that "diploma." But home-schoolers are protected, so everybody's happy.
There is more than one way, in other words, to slice the problem of "assessment" of schools. Are the schools solely responsible for students who drop out? If so, look to them to find solutions like this. Are the students responsible? If so, what do we do: ignore 'em, or put 'em in jail?
Whenever we apply the blanket of "assessment," especially when "assessment" = "give 'em a grade!", expect the harm to fall, not on the institutions, but on the people they are supposed to serve. You can say that disservice is the fault of the school; but there's plenty of blame to pass around, and precious few efforts at real solutions.