A PROGRESS REPORT OF THE COOPERATIVE RESEARCH PROJECT CONCERNING THE EFFECTS OF VALUE SYSTEMS UPON SCHOOL LEARNING AMONG GHETTO CLUB MEMBERS IS PRESENTED. STREET GROUP MEMBERS CONSIDERED SCHOOL LEARNING IRRELEVANT TO PRESTIGE WITHIN THE GROUP. THEY WERE CONCERNED WITH TOUGHNESS, SMARTNESS, TROUBLE, EXCITEMENT, AUTONOMY, AND FATE. FULL PARTICIPATION MEANT COMPLETE INVOLVEMENT WITH THE VALUES AND ACTIVITIES OF THE GROUP. THE ACADEMIC RECORDS OF 75 PREADOLESCENT AND ADOLESCENT BOYS WHO WERE NONMEMBERS OF STREET GROUPS INDICATED THAT SOME WERE BELOW, SOME WERE WITHIN, AND OTHERS WERE BEYOND GRADE LEVEL IN ACCOMPLISHMENT. LEARNING WAS TAKING PLACE. READING AMONG 43 STREET GROUP MEMBERS SHOWED A REGULAR DISTRIBUTION AROUND A SINGLE MODE, 3 YEARS BEHIND GRADE. THERE WERE MANY DROPOUTS. OVERALL FINDINGS INDICATED THAT CULTURAL CONFLICT WAS RESPONSIBLE FOR READING FAILURE. SUGGESTIONS FOR CONTINUING STUDY INCLUDE THE INTRODUCTION OF A CULTURAL INTERMEDIARY CLASSROOM TO DEVELOP TECHNIQUES FOR CROSS-CULTURAL COOPERATION. (MC)