The interaction between state educational reform and curricular services for special needs students, mainly the economically disadvantaged, is discussed in the context of state and federal compensatory education services. Data from eight schools in California suggest that such services can succeed and that excellence and equity can be compatible.…

Federal and state educational indicator systems should include assessments of school context as well as of student outcomes. A review of the literature suggests that access to knowledge, pressure for achievement, and professional teaching conditions are the best general constructs to provide bases for school context indicators. (TJH)

Development of state leadership in implementing the quality mandate of Chapter 1 supplementary education programs is traced up to the 1988 Hawkins Stafford Act, which added procedural and accountability requirements. Challenges that states now face in the program improvement processes are described. (SLD)