This study calculates the financial impact on the state when Texans leave high school but fail to learn basic reading, writing, and math. Many of these students simply drop out, but an increasing number of them are students who graduate but still lack basic skills. The financial impact on the state manifests itself in a variety of ways – lower earning potential and poor productivity of workers, increased spending on social programs, direct costs of remediation by institutes of higher education and employers, and personal losses that may affect individuals for a lifetime and the state for generations.