Grading variation was a major source of discrepancy between grades and test scores. The analysis suggested Scholastic Engagement as a promising organizing principle in understanding student achievement. It was defined by three types of observable behavior: employing school skills, demonstrating initiative, and avoiding competing activities. Groups differed in average achievement, but group performance was generally similar on grades and tests. If artifactual differences between the two measures are not corrected, common statistical estimates of test validity and fairness are unduly conservative. Different characteristics give grades and test scores complementary strengths in high-stakes assessment.