There is a divide in Maryland's schools. Although the state's high school graduation rate is above the national average, its urban school districts have suffered from years of decline. In 2007, the Baltimore city school district's graduation rate was only 35 percent, compared to 81.5 percent in Baltimore's suburbs and 76 percent statewide. The divide between urban and suburban graduation rates in Maryland is the highest in the nation. Among the nation's 100 largest school districts, Baltimore has the 98th-lowest graduation rate. This study documents the public costs of high school dropouts in Maryland. The author and his colleagues examine how Maryland's decreasing graduation rates are materially affecting the state's finances through reduced tax revenues, increased Medicaid costs and higher incarceration rates. This study examines how increased competition from private schools could raise public school graduation rates and save Maryland taxpayers millions of dollars each year. This research suggests that expanding school choice programs in Maryland would significantly improve public high school graduation rates in a cost-effective way. Introducing educational competition would have a profound impact on reducing the costs associated with high school dropouts. Most importantly, school choice programs would provide meaningful choices for low-income families and would provide large public benefits equal to or greater than those realized by the students themselves. (Contains 10 figures, 7 tables, and 34 endnotes.) [This study was released jointly by the Friedman Foundation for Educational Choice and the Maryland Public Policy Institute.]