As New York State raises its math and reading standards to conform with the Obama administration's agenda -- and makes its tests more challenging -- officials have predicted scores will suffer. But today, Board of Regents Chancellor Merryl Tisch also acknowledged that these efforts could affect graduation rates.

At an event at the New School, Tisch said students who passed with a low level 3 on previous tests might now get 2s. She said "it's going to be a very complicated time." And, as the state gets ready to align high school graduation with college preparedness, she said: "Once we do that, and we say, for instance, that a 65 on a Regents does not mean that you are college ready, and we move that 65 to 75 to define a high school graduation requirement that is aligned with college ready as the federal government is asking us to do, that it's going to give us all pause."

Not that she had any specifics, though. A spokesman for the state's Education Department says the Regents created a College and Career Readiness Working Group a few months ago. This group is charged with developing recommendations for possible changes to Regents exams and the New York State high school diploma requirements to better align them with college and career readiness. But no decisions have yet been made about changes to the existing diploma requirements.

Meanwhile, the city is planning to to double the number of students in summer school this year to 21,000, based on its own estimates for how many kids will fail their elementary and middle school exams. Scores aren't due out until late July because the math and reading tests were given later than usual this year.

Tisch was at the New School because its Center for New York City Affairs had just released a report called "Managing by the Numbers," a very thorough study of the city's A through F grading system for public schools. Researchers interviewed hundreds of principals and administrators over the past three years and also visited dozens of schools, especially in the Bronx. They gave the city credit for helping failing schools improve by giving their principals more power. But the report found the city's A through F letter system to be "deeply flawed."

The report's senior editor, Clara Hemphill, says she saw mediocre schools that were rewarded with A's while good schools that engaged their students through the arts and a challenging curriculum weren't recognized for making progress. She blamed that on the city's over-reliance on state math and reading tests, which account for 85 percent of a school's grade.

"The problem is that they're being used to measure progress -- year to year progress -- and the tests just are not precise enough, they're just not designed to do that," Hemphill explained. She said most test questions are used to determine whether a student will pass, and don't yield enough nuance about the child's performance.

When test scores went up citywide last year, 97 percent of elementary and middle schools received A's and B's on their progress reports. The Department of Education recognized the grade inflation this year by announcing it would limit the numbers of A's to 25 percent. And the official in charge of grading the schools, Shael Polakow-Suransky, says the city is aiming for more precision. But he says "you can't make perfect the enemy of the good," adding that the state exams do show legitimate patterns of student growth.

"When you look closely at the state exams there are definitely areas where they can be strengthened, but the differences in how kids perform on those exams matter a lot to their future outcomes," he said, explaining that the city can predict how many students will graduate high school based on their test scores. A student who scores a level 3 on his or her eighth grade tests has only a 50 percent chance of graduating high school but that rises to more than 80 percent if the child scores a level 3.5.

As for what will happen as the state tests become more challenging, Polakow-Suransky seemed pretty confident about the city's standing. "People rise to the occasion," he said, noting that New York City students have made bigger gains than other students on the state exams.