Nearly 1 in 4 California students will drop out during high school, state educators said Wednesday, basing their prediction on what they said is the most accurate information about student attendance they've ever collected.

Using a new student-tracking system, state educators found that 127,292 high school students in ninth through 12th grade quit school during the 2006-07 school year. That means 24 percent of incoming freshmen won't stay in school long enough to graduate, researchers said, assuming that pace remains steady.

"The dropout rate is a crisis," state schools chief Jack O'Connell said as he released the new data, which show tens of thousands of African American and Latino students abandoning school at far higher rates than other ethnic groups. "Schools will now be held publicly accountable for finding out what happened to students."

The new dropout rate is far higher than the 13 percent educators had earlier estimated using less-sophisticated counting methods they had relied on for years.

"I was quite shocked at how many students are falling through the cracks," said O'Connell. "The dropout crisis is a statewide crisis."

Using its new "Statewide Student Identifier System," the state Education Department has given every student a unique and anonymous identification number. With that, schools can track the whereabouts of missing students for the first time and learn whether students are truly absent without leave or whether they are somewhere legitimate.

Did they leave the state? Join a homeschool? Die? The new system recognizes 29 kinds of student invisibility, 10 of which are counted as dropouts, including "expelled."

One stunning fact learned from the new system was that 53,600 students who said they were transferring to a new school last year never actually showed up.

Another is that the state now knows for the first time that there were 4,609 dropouts who completed all graduation requirements but one: the mandatory exit exam.

"Today, we have the tools for the first time to report the rates with a much greater degree of accuracy than in the past," O'Connell said.

The superintendent said that having a more accurate picture of the fate of the missing students will help the state target its anti-dropout expenditures more wisely.

Many African American and Latino students could use that help.

Earlier estimates suggested that 10,000 black students would quit. But the expected number is nearly twice as high: 19,440.

For Latinos, the estimate was 37,716 dropouts. The actual number is estimated at 69,035.

These figures translate into astronomical dropout predictions over the next four years: 42 percent for black students and 30 percent for Latinos.

"It's high time we started telling the truth about these numbers," said Russlynn Ali, executive director for Education Trust West, an Oakland group working to raise achievement for students of color. "Federal and state accountability systems don't ask us to do much about changing these numbers. We need to set ambitious targets for all students to increase graduation rates."

California's dropouts cost the state $50 billion per year, said incoming state Senate leader Darrell Steinberg, a Sacramento Democrat who quoted studies showing that over their lifetimes those who quit are more likely to be unemployed, turn to crime, need state-funded medical care, get welfare and pay no taxes.

Fixing the problem "is our most important economic strategy in California," he said.

Bay Area dropout rates vary widely by school district, but three have rates far higher than the 24 percent state average: Oakland Unified (37 percent), West Contra Costa Unified (40 percent), and Vallejo City Unified (42 percent).

"Clearly, a 42-percent dropout rate is unacceptable for an educational institution," said Vallejo schools spokesman Jason Hodge.

In San Francisco, 1,052 high school students quit last year. Based on that, researchers believe that 21 percent of entering freshmen will quit before earning a diploma.

Superintendent Carlos Garcia pointed to numerous existing programs intended to reduce dropouts, but several appeared scant: The district has but 15 "outreach consultants" and seven "attendance liaisons" who make home visits, and just one "stay-in-school coordinator" for high-needs students.

However, the district has a "transition program" to help students who are changing schools and programs. State Superintendent O'Connell said the data show that students in transition are most at risk for dropping out.

The new statewide report shows that 351,035 students in the class of 2007 earned a diploma, or 68 percent.

But what happened to everyone else? That's always been the "million-dollar question," said Russ Rumberger, a professor at UC Santa Barbara who has tracked dropouts as director of the privately funded California Dropout Research Project.

Rumberger said he is pleased that the new student ID system gives educators a better spyglass than ever on the whereabouts of missing students.

Not all are dropouts. About 8 percent are "completers" who neither dropped out nor earned a diploma.

Included in that 8 percent are 770 students who died. Nearly 5,000 graduated - but because they were disabled and used modifications to help them pass the exit exam or were exempted from taking it, they earned a certificate of completion rather than a diploma. Nearly 62,000 students moved out of state. And many others entered a medical facility or took a high school equivalency test.

E-mail Nanette Asimov at nasimov@sfchronicle.com.