New York state’s high school graduation rate may take a hit due to an under-the-radar provision in the new federal education law.

The Every Student Succeeds Act, or ESSA, requires states to count only “standard” diplomas earned by a “preponderance” of students or honors diplomas in their federal graduation rate. It’s possible that definition would exclude New York’s “local” diploma, a less rigorous option earned by only about 4 percent of graduating students. (Most students earn a “Regents” diploma, which requires higher exit-exam scores than the local version.)

The U.S. Education Department is currently reviewing New York’s ESSA plan. It’s unclear how the federal agency will enforce the graduation rule — and whether New York’s local diploma will pass muster — but experts say it does not appear to meet the requirements of the law. If so, New York may be forced to lower its graduation rate or report separate state and federal rates.

“The law is really clear about what can be counted,” said Anne Hyslop, an education consultant who formerly worked as a senior policy advisor at the U.S. Department of Education. “As long as the Regents is the standard diploma, the only diploma that can be counted is a higher, more rigorous diploma.”

U.S. education department officials declined to say whether New York’s local diploma will count towards the state’s graduation rate under ESSA. New York officials noted that their plan is still under review.

Indiana has already felt the effects of the new rule.

Indiana’s education department announced that in response to the federal law its “general” diploma which is earned by about 12 percent of Indiana graduates who struggle academically or have a disability will no longer be included in its federal graduation rate.

The federal rate is used to hold schools accountable for their performance. States must target any school with a graduation rate below 67 percent for improvement, though states can decide which interventions to use. (New York’s plan allows schools to use their six-year graduation rates to meet that benchmark.)

In response to the new rule, Indiana officials are considering using two different graduation rates: one for the federal accountability system and the other for the state’s. In practice, that would mean different sets of criteria for when state and federal school interventions kick in.

New York could theoretically use two separate counts as well. In that scenario, it would use the lower federal rate for ESSA accountability purposes, such as identifying low-performing schools. But it would still maintain a state rate that factors in local diplomas — a move that would enable students to keep earning the local diploma, which is recognized by colleges and the military.

“The local diploma can still be awarded,” Hyslop said. “That diploma still carries meaning.”

But reporting two separate graduation rates has drawbacks particularly for anyone who wants to understand how schools are performing, said Michael Cohen, president of the nonprofit Achieve, which helps states work on academic standards.

“It would be confusing to anyone who wants to know what the actual graduation rate in the state is,” Cohen said. “If I were a resident in a state that did that I would wonder what’s going on.”

The intent of ESSA’s “preponderance” rule is to push states to issue a single diploma option without lowering the bar for any students, including those with disabilities. Many advocates think if states create easier options it will lower expectations for some students.

“We do believe that students with disabilities largely can achieve the regular standards diploma options,” said Melissa Turner, senior manager for state policy at the National Center for Learning Disabilities.

But sticking to a single graduation cutoff inevitably means leaving some students without a diploma, which can thwart their job or college ambitions.

Rather than withhold a diploma from students who score below the cutoff, New York created the local diploma option. It functions as a safety net for students who are struggling academically, still learning English or have disabilities. There are several ways students with disabilities can earn the credential, but the most recent option allows students to graduate by passing only the math and English Regents exam.

“It’s about providing different avenues – equally rigorous – for kids to demonstrate they are ready to graduate with a meaningful diploma,” said state education department spokeswoman Emily DeSantis, adding that officials would include ESSA in their graduation discussions over the coming months.

Still, experts warned that New York’s alternative diploma options may run afoul of ESSA.

If New York was “really following the letter of the law they would just drop their graduation rates,” by a few percentage points, said Monica Almond, the senior associate for policy development and government relations at the Alliance for Excellent Education.