Here is how I do it:
First, all quilts only require one yard of fabric (I am cheap)for the top. I ask the grad what their favorite color is and try to find something that looks sorta stained glass-y in that color for the top.
I increase the size of the pic, so that it is as large as possible, but still fits within one yard of fabric. I try to choose a pic that shows their face good, but I need them leaning against or on something (see Ethan's link for an example). In these 4, the first one - my nephew - was leaning on a windowsill. The other boy was leaning against a tree. The girl in green had her back to a tree and her arm behind her. The girl in red was hugging a tree. Unfortunately with the boy in sunglasses and the girl in red, that meant I had to make their face areas smaller, so I wasn't cutting off their arm or something.
I take the photo, and find the basic lines that will create the pic. I try to add enough detail to make it interesing, but not so much to make it a pain to cut or too eye confusing.
To get the basic lines, usually I just tape the photo to a window, and draw on the back side. It is easy then to take the paper away from the light source, and just see the sketch, so that you can tell how well the pic is working.
Once I have the sketch as I want, I am ready to begin in fabric.
I take the one yard of stained glass fabric in their favorite color, and press fusible to the back. If I want the quilt in the same orientation as the pic, I need to pin the pattern sketch to the back of the fabric, if I don't care, I can pin it to the front of the fabric but it will be in reverse of the pic. I like to have the pic hang beside the quilt when they hang it at their graduation reception, so everyone can see it is them.
Once I have the pattern pinned to the fabric, I am ready to cut. I take the smallest rotary cutter I own, and do big flowing cuts, not spazzing over the way the tshirt hangs, or exactly how the hair flows. The trick is to be a smooth line. I cut the long big lines first, then work my way down to the smaller lines. And as needed, I make tiny cuts with a small scissors.
As I cut long lines (like the edge of a shirt, or the side of the diploma or the hair), I dont' worry about keeping an even 1/4" line, as a matter of fact, I make sure there is NOT an even line - it looks more interesting.
One thing I have found makes it much easier, is to not cut pieces apart, but leave them connected. It is easier knowing for sure where all the parts go. You can see the Logan's has the bottom of his front sleeve all the way cut, there is a slight bit that is uncut. Also, his hair is not a solid line. Whitney also has several places that it is just a hint of the shape, and is not completely cut out.
You want to be sure to have the pattern firmly pinned in many places, so that the fabric doesn't slightly shift as you are cutting, making it more difficult later. If it does shift, you can make a slight cut to shift it back. This happened when I did one of the diplomas, so I just recut the end of the diploma and shifted the fabric back into line.
Once all the cuts are done, you need to remove the paper from the back of the top. I leave it on, to help make the fabric stiffer while cutting, so there is not too much shifting.
Now, you need to lay the top onto a solid black fabric, which will show through areas that are cut out.
I like to put the black fabric onto my pressing board, with the top over it, and pin in places as I get it all laid out. I use just the tip of my iron to press a big center area, then work my way out from there, so I can shift as needed. I keep the small scissors with me, and make any adjustments as I see they are needed.
Once I have the top fused down, piece by piece, I go over the entire quilt a million times, to be sure there are no loose spots and the fusible is holding on good.
Next I print out their name and the year in a fun font, in a large size. Boxy type fonts are easier to cut. Again, I use a rotary cutter where possible, and finish up with a small scissors. For example, on the "O" I couldn't turn the cutter enough, so just did the inside edges which are straight with the rotary cutter, then did the outside edges with the scissors, taking care to leave a tiny bit uncut so the center wouldn't fall out and get lost.
Then I plan where to make the wavy edges. I think this type of quilt requires something other than a box, so I try to find lines to mimic for the edges. I was worried that if I had too much sticking out on the sides, it would flop, but all of them did fine. Again, I make this cut with a quick flowing of the rotary cutter.
I leave the top a little long, and turn over the top edge to make a pocket to insert the rod - you can see that on the boys' quilts.
Then, the only thing to do is the tassle. Take a skein of embroidery thread - DON'T open it up - leave the papers on each end. Pull out one thread from the skein, just until it is ready to go back the other direction,do two of these. Use one thread to go through an end, so that you catch all threads, and tie it in a double knot to secure all threads. Do both ends.
Next, take a gold ribbon (mine was a flat ribbon, with ridges to look like several smaller ribbons together), and hot glue the skein on each end.
Take the ends of the thread you tied the end with, and make a double knot as close to the end of the thread as you can, so you have a loop to hang the tassel.
Now cut the skein in half so you have two tassels! Leave the papers on until you are ready to apply the tassel to the quilt, it will help it to stay untangled.
Apply a black button in the center of the cap. Place the loop of the tassel over the button. Entering from the back side of the quilt, pull the tassel to one edge, at an angle and sew a couple stitches over the thread loop to secure.