This literature review provides a history of education reform in the United States along with the basis for a transition to standards-based grading. The educational system is a complex network of intertwining parts that work together with the goal to mold a child into a valued member of society. Continual passage of educational laws has helped develop education reform within the United States. Adoption of federal and state laws helps create consistency amongst schools. Grades are held with high regard and deserve accurate representation within an unbiased grading system. Many components are encompassed in the transition to a standards-based grading system. Standards-based grading reflects the recurring need for change and reform adapting to and using new strategies such as formative and summative assessments.