The prospect of 1.7 million surplus teachers in the next 12 years is affecting policy at every level, and a recent survey of teacher education institutions shows that many are cutting back or dissolving their programs. There are three reasons for not taking such a course of action: a) there is a possibility of revenue sharing, probably in the area of special education; b) state 1202 commissions may have power with respect to the definition of what the roles and tasks of the teacher education institutions are; and c) there will probably be a small amount of targeted federal work out of the National Institute of Education, the Foundation for the Improvement of Secondary Education, and the Office of Education. Federal funds may be merged to make a special revenue sharing authority, and teacher training done under this authority will have to be via some kind of contract through state education agencies (SEAs) or local education agencies (LEAs). To plan realistically for this possibility, the SEAs and LEAs will have to consult with the 1202 or state higher education planning commissions if they expect to use higher education resources. Targeted federal work will include several areas: a) further serious study of present accreditation practices; b) the credentialling of teachers; and c) better recruitment and counseling for teachers and better counseling for teachers who are in-service; and d) clinical schools. (HMD)