You have a valid case, and little reason (I suspect) to think the appeal won't be accepted. The key is to stay calm and neutral of emotion.

I would recommend putting together a written document you can hand to the coordinator at the appeal: the first part of it should include all of the testing results in writing, including the STAR test being one point away from the cut-off. Next, include any other testing results that show her ability and achievement levels. I would then include (last thing) a brief statement re her high level of motivation. If you can get a written recommendation from your dd's current teacher I'd include that also.

I am not sure what the "goal plan since K" you mentioned is - is it an ELA plan, and is it some type of differentiated work? If so, her performance on it may be relevant and worth including.

I would probably not mention:
"She has been in a nationally recognized weekend gifted program since K" - unless this is a program that you have to qualify for with testing.
"She participates in the EPGY math program" - again I don't think this would mean much to the school with re to the ELA decision - first, I think it's possible to get students into EPGY without much proof of giftedness when they are young, and second, it's math. She's already qualified for the math program at school.
"She spends her days in class reading b/c she is finished with work(can read 40-100 pages a day in class in addition to finishing her homework while in class)." - this may or may not help. It doesn't necessarily relate to needing a higher level of challenge - just says that she can finish her in class work quickly.
"She is very self motivated and loves to learn, but sadly is very frustrated in the school environment." Keep the emotions out of this discussion - both yours and hers. If the meeting appears to be headed to a denial, you can bring up that she's frustrated, but I wouldn't do that unless I felt for certain the appeal was going to be denied. If you do mention that she's frustrated, don't phrase it as "sadly she's frustrated" - just be straightforward without attaching your emotion to it.

"her state testing(they don't use this as a qualifier) was off the charts." - state testing is most likely not used because (if it's like most state tests) it is typically geared to assessing whether or not a student has mastered the current grade level curriculum, and doesn't differentiate between high-ability students.

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I feel that all other indicators show she belongs, but to block her because of one test and not take into consideration that she is not only getting A's, but 100% and the fact that she received the highest points for teacher recommendation is a disservice.

*You* feel it is a disservice - but the school may see this as a case of having to set some type of policy, having to have some cut-off point - this isn't anything personal re your daughter. (please note - I agree with you and would feel the same way you do - but I'm trying to point out what you need to focus on to advocate successfully).

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Anyone have any success appealing a decision like this?

YES. Not in your state or your school district, but our ds is one of the high ability kids on this board who scored much lower on the Cogat than on WISC/WJ-III/etc. We did successfully appeal.

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I don't want to insult their selection process, but I feel like my daughter needs to be in a more challenging environment.

Your feelings are valid, but you don't have to go about this by starting off telling the school your dd needs to be in a different environment - chances are you wouldn't be the first or the fifth or the 2100th parent who's tried that argument to get their child into the program (I've been surprised how many parents with test scores way below any type of cutoff in our district will fight fight fight to get their kids into the gifted programs because their children "need" to be in a more challenging environment. To be honest, I suspect most of their children to need to be in a more challenging environment. The key here thought, is that you have a very strong *data* to back up your appeal. Advocate from the data, not the emotion, and I suspect it will be a very quick meeting with a decision to admit your dd.

Best wishes,

polarbear