In the spring of 1988 the South Carolina exit examination will be administered for the first time to determine if tenth-grade students will receive a regular diploma when they graduate from high school. School districts will be required by the Education Improvement Act to provide remediation to students who do not pass the exit examination, and these students will have three additional opportunities to take and pass the test. Concern exists that failing the test, particularly on the second administration, may serve as a disincentive for continued school attendance. School districts with relatively high dropout rates can act now to reduce their potential for increased dropouts following the exit examination. Districts can employ the following strategies: (1) self-assessment of school-based factors contributing to students' dropping out; (2) identification of students not likely to pass the test; (3) identification of demographic characteristics common to dropouts followed by development of appropriate outreach activities; (4) provision of remediation in skills the examination will test; (5) delivery of more frequent performance feedback to students and parents; (6) assignment of teachers and counselors to give special attention to those students at risk of failing the examination or of dropping out; and (7) development of a plan to keep students in school who do not pass the examination. (A chart identifying South Carolina school districts which need to take extraordinary initiatives to prevent the potential of increased dropouts following the exit examination is included.) (ABL)