Seeing as we have pretty much removed the stick, the carrot may be worth a try. Without trying to sound like a curmudgeon....when I was in school (in the 80s) we would have been suspended or paddled for a large majority of things kids get away with in today's public schools. From my personal experience, a HUGE proportion of "under preforming" students just don't take school seriously. While not always the case, this is often because their parents aren't doing their jobs at home.
Teacher to parent: "Brian hasn't turned in ANYthing for 2 weeks. If we don't get him to start taking his education seriously, he's going to fail this class."
Parent's response: "I just don't know what to do with him. He's always out with his friends, and I can never get him to do his homework." ...grow a pair and take some responsibility.
Public schools are faaaaaar from perfect, but they're caught, in that they can only react to external problems...and with a dwindling set of tools.