When generating a list of students in a roster it looks at the complete history of that courses roster. Filtering for a specific year using the School Year Label field will filter the list further to only look at a course roster for that particular year; However, it will still include dropped students as they were at one point a part of the roster. To correct this, do the following:
  1. Navigate to Core > Lists > More Lists
  2. Search for your list and click Edit
  3. On the Criteria tab, add a new Criteria by clicking the + symbol
  4. For the Field dropdown, select Dropped 
  5. For the Condition dropdown, select Equals
  6. For the Value dropdown, select False
This will prevent any students dropped from the course from appearing in the list results.