Americans have long believed that the combination of a solid education and hard work is the key to achieving the American Dream. That’s true, but there are impediments to the smooth operation of the traditional formula for upward economic mobility that researchers on both the left and the right agree need to be addressed.

One is the changing structure of families, which can derail progress for some. Another is the challenge for many workers of making enough to support their families and move up the economic ladder. And yet another is that our education system is not delivering what is needed for millions of Americans to succeed.

Education was once thought of as the great equalizer by giving everyone a similar start in life. But too often it becomes a contributor to inequality by failing those who start out nearer the bottom – those who already face deficits in early learning and development. For example, although public high school graduation rates are now improving, there remain big gaps related to race and income. Moreover, a high school diploma typically is no longer enough in the modern economy, and so a college credential matters. But there again, there are large income and racial gaps in graduation. And although a college degree continues on average to produce a good income return on investment, even for students with loans, high drop-out rates and tuition and debt worries seem among the reasons there has been a startling drop in college enrollment among low-income students in recent years.

But behind the averages there are some creative bright lights that suggest the patterns can be reversed for low-income students. For instance, a recent analysis of New York’s public “small high schools of choice” found markedly higher graduation rates for disadvantaged students of color. A review of 6000 charter schools suggests they can boost graduation in college as well as high school and significantly raise future earnings. Studies indicate that some school partnerships with employers, such as Career Academies and apprenticeship programs, can also prepare young people more effectively for college and the workforce. And newly designed and low-cost colleges such as College for America, using more online courses, appear to be delivering good results at much less cost.

So how can we encourage more such innovation in education for low-income students? How do we discover what really works for these students who are being let down by the current education system? And how can we incorporate and replicate successful approaches?

It needs several steps. One is to improve the collection of data and conduct more rigorous evaluations of promising experiments. That’s harder than one might think. Many innovators don’t have the needed data infrastructure, and proper evaluations are much too rare. But investing in gold-standard evaluation is critical to enable schools and colleges to identify and incorporate proven reforms.

Parents and students also need useful and reliable quality data to drive change by being informed customers. That’s also often lacking, but it is slowly improving. Most states now have federal grants to develop data systems to help track students over time. The federal government has also been beefing up its college scorecard, and federal data on student borrowers is being analyzed to reveal more information on student outcomes. These developments will eventually make it much easier for students to shop for a school and major that will pay off.

As a second step, there needs to be more flexibility in budgets at all levels of government to allow educational innovations to be explored and services to be customized for students. One example of this is the growing opportunity for children in cities like Washington D.C. to attend a wide range of charter schools. Another is “two-generation” approaches that work with parents as well as children and provide “wraparound” services. These may yield improvements in educational results as well as household economic mobility, especially if the school functions as a community hub.

But for two-generation models to operate well, money from different agencies and program categories has to be braided together. Usually that requires overcoming bureaucratic and often legal hurdles. When these integrated approaches are tried, however, we also need careful evaluations to understand what does and doesn’t work before they are scaled up.

A third necessary step is to remove legislative and institutional obstacles to new ways of doing things in education. That can be very difficult in higher education, where the accreditation system imposes barriers to entry into the market for creative new business models – thus making it easier for established institutions to stymie competition.

Accreditation is also a requirement for federal student aid. Fortunately the power of the accreditors may be slowly declining as some established colleges are forming partnerships with providers of massive open online courses (MOOCs). Other low-cost innovators with industry backers who recognize course credentials are able to ignore accreditation as a measure of quality. Furthermore, the federal government is now taking welcome steps to open up the higher education market to greater competition.

Good education empowers Americans to move up the economic ladder. But today the education system fails millions of low-income students and is no longer the great opportunity equalizer.So it is time to take some sorely needed actions to shake things up.