In a study released Tuesday, the department found that 91.4 percent of Vermont high school freshmen go on to graduate on time.
Wisconsin had the second highest rate at 91.1 percent while Nevada had the lowest rate at 57.8 percent with the District of Columbia next at 59.9 percent.
The nationwide calculated Averaged Freshman Graduation Rate was 78.2 percent for the 2009-2010 school year, the highest since 1976.
Education Secretary Arne Duncan says the increase in graduation is because of the recognition that people need a good education to get good jobs.
Duncan says the trends are hopeful but the high school dropout rate is still unsustainably high.