This report deals with the aid to local school systems with high concentrations of children from low-income families, but excludes treatment of two other categories of financial assistance under the Elementary and Secondary Education Act, Title I--aid to children of migrant workers and American Indian children attending schools operated by the Bureau of Indian Affairs. The study has been undertaken because of the failure, reportedly, of accepted experts to inform the public correctly the manner in which Title I is operating in many sections of the country. Data utilized include information from interviews with Federal, State, and local officials, and with parents of participants; records and files of the Department of Health, Education and Welfare (DHEW); audits of Title I performed by DHEW Audit Agency; and, data from selected local school systems and State Education Departments. Chapters cover the way in which Title I works; Title I as general aid; Title I in place of State and local funds; construction and equipment; failure to meet the needs of educationally deprived children; lack of community involvement and denial of information; and, Federal and State administration of Title I. Major findings are that often Title I has not reached the eligible, and has been little used to meet their needs. Recommendations for reform are detailed. (RJ)