WASHINGTON — Over these next few weeks, 56 million American kids will start kindergarten through 12th grade. Even before an assignment or test is handed out, Education Secretary Arne Duncan has a grade for the system: B.

“We’ve stagnated,” Mr. Duncan says of the U.S. educational system. “Other countries have passed us by.”

Few dispute that. An evaluation by the Organization for Economic Cooperation and Development ranked the United States 18th among 36 countries in secondary education. Almost 25 percent of U.S. students fail to graduate from high school on time; in South Korea, it’s 7 percent.

Mr. Duncan says the long-simmering debate between liberals and conservatives is a false choice; both are right. American schools need more money and more resources, yet without changing the performance-based system and more accountability, they won’t make much difference.

The former head of the Chicago school system and onetime Harvard basketball star — an oxymoron he acknowledges — the 44-year-old Mr. Duncan wants to change that. He is perhaps the most ambitious and energetic U.S. education chief since the department was started about 30 years ago. He is spending a record amount of money and making sweeping demands on the educational system.

“With unprecedented resources and unprecedented reform, I think we have a chance to make a fundamental and historic breakthrough,” he said in an interview.

Many in the American school-reform movement, from leading business figures to involved social entrepreneurs, agree. “The president and Arne have made more progress in education policy in the first 200 days of the Obama administration than in the first seven months of any new president in American history,” says Jon Schnur, head of New Leaders for New Schools, which trains principals to take over troubled schools. Mr. Schnur took a leave at the beginning of the year to help Mr. Duncan get started.

The Obama economic-stimulus package contained $100 billion for education. Much of that was to stave off cutbacks at the state and local levels.

Still, a considerable piece of change is geared toward initiating new programs largely predicated upon school systems’ meeting four conditions: upgrading teacher quality; adopting more rigorous academic standards; overhauling the lowest-performing schools; and creating systems to better track student progress. Congress gave Mr. Duncan wide latitude in implementing these conditions — a size and scope other education secretaries could only dream about.

A policy centerpiece for Mr. Duncan is almost $5 billion for the “Race to the Top” initiative, federal money that will be distributed to states that make the most measurable progress in improving educational outcomes and school districts that devise innovations that can be replicated elsewhere.

In suggesting how to win Race to the Top funds, Mr. Duncan is emphasizing charter schools, which, while a part of the public system, are operated independently and often permit more innovation. The lure of this money and the prestige of winning it have already led seven states, including Mr. Duncan’s home turf of Illinois, to remove limits on the growth of charter schools.

He would also tie teacher evaluations and pay more closely to how much student performance improves. Mr. Duncan has been the driving force among 47 states and the District of Columbia collaborating to devise a common set of internationally competitive reading and math standards. (The holdouts are South Carolina, Alaska and Texas.)

In many states, he notes, the “standards are so low that the child who is meeting them is barely able to graduate from high school and is totally underprepared to go to college.” Mr. Duncan, a favorite of President Barack Obama, his Chicago pal and sometime basketball-court mate, has a lot of leverage. He also faces resistance.