funnybone: It is standard knowledge, and nothing controversial, that the government does not financially or otherwise penalize schools whose students are largely failing. This isn’t even under dispute. If the government did penalize for that, most NYC public schools would be penalized.
The law simply requires a certain curriculum. The law doesn’t require that any percentage of students actually pass the courses in that curriculum. As such, the government cannot go above the law and require what the law doesn’t require.