An estimated 40,000 students statewide are eligible.
California's rank dropped from 30th to 33rd, although graduation rate increased.
The new law would grant diplomas to those who failed the high school exit exam.
The law would apply to students who have been trying to graduate since 2006.
Some students struggle with the requirement to meet UC and CSU standards.
The national graduation rate is 81.4 percent for all students.
California graduation rates hit new high.
The California high school exit exam would be suspended for several years and its role would be re-examined under a bill proposed last week by the chair of the Senate Education Committee.
Half of the state’s community college students take four years or longer to earn an associate degree that’s designed to take half that time, according to a new report.