Citing new estimates, Obama said four out of five schools may be tagged as failures this year under provisions of the Bush-era No Child Left Behind law.
"That's an astonishing number," he said. "We know that four out of five schools in this country aren't failing. So what we're doing to measure success and failure is out of line."
Obama's call for a rewrite of the education law appears unlikely, at least by his September deadline. The House education committee's Republican chairman acknowledged the need for improvement but called the president's time line "arbitrary."
While the law enacted in 2002 under George W. Bush has become an easy political target, Obama acknowledged that it set the "right goals": educating all children, having a highly qualified teacher in every classroom, and highlighting the achievement gaps between rich and poor, white students and many minorities, and students with and without disabilities.
But he said improvements are needed in measuring student progress and labeling schools that fall short. He called for measuring creativity and critical thinking, along with math and reading skills, and for rewarding good teachers while showing little leniency for bad ones.
"In the 21st century, it's not enough to leave no child behind," Obama said. "We need to help every child get ahead. We need to get every child on a path to academic excellence."
The Education Department estimated last week that the percentage of schools labeled as "failing" under the law could more than double this year, jumping from 37 percent to 82 percent as states boost standards to try to satisfy the law's mandates. The law set a goal of having all students proficient in math and reading by 2014, a standard now deemed unrealistic.
Schools that fail to meet yearly targets over time are labeled as needing improvement, a designation that upsets many parents who consider it an unfair stigma. Such schools often are described as failing, although the law itself does not use that term. Obama suggested it does, however, by repeatedly using the word "failing" to describe such schools during Monday's appearance at an Arlington, Va., middle school.
Obama said he wants a more flexible system focused on preparing graduating high school students for college and career, and assessing whether that goal is being met. Reading, math and science proficiency will continue to be emphasized, he said, but skills like critical thinking, creativity and collaboration should also be measured.
He also called for better efforts to prepare and support teachers that encourage their creativity yet holds them accountable for student progress and doesn't make excuses for the occasional bad teacher.
Obama has met several times this year with a bipartisan group of House and Senate lawmakers leading efforts to rewrite the law. Both Republicans and Democrats agree that an update is needed; they disagree on the federal government's role in education and on what's the best way to turn around schools with a history of poor performance.
The Senate committee handling education held 10 hearings on the issue last year and its chairman, Sen. Tom Harkin, D-Iowa, has said he is working with Republicans to introduce a bill by Easter.
The situation is far different in the House. Speaker John Boehner, R-Ohio, who was chairman of the House education committee when the No Child Left Behind law was enacted, has not indicated whether he intends to make the rewrite of the law a priority.
Rep. John Kline, R-Minn., the current chairman of the House education panel, acknowledged the importance of overhauling the education law but suggested that Obama's September deadline had already fallen by the wayside. He said the committee was continuing to get input from school officials and state and local leaders.
"We need to take the time to get this right," Kline said. "We cannot allow an arbitrary timeline to undermine quality reforms that encourage innovation, flexibility and parental involvement."
Obama has been visiting schools around the country -- in Miami, Boston and Arlington, Va., so far -- to promote his education agenda, while fighting with lawmakers over how deeply to cut domestic spending to balance the budget and begin trimming the federal deficit.
Insisting he recognizes the need for fiscal discipline, Obama reiterated Monday that education spending is an area where he is unwilling to compromise. He said an educated and skilled work force will attract jobs and make the country more attractive to businesses.
"We cannot cut education. We can't cut the things that will make America more competitive," Obama said.
Education is one of Obama's better issues, according to recent AP-GfK polling that found nearly two-thirds of the public, or 64 percent, approve of his handling of the issue.
A majority of the public also views the education law unfavorably. An AP-Stanford poll last fall found that two-thirds of the public either thought the law has had "no real impact" or had made schools worse.