Most treaties negotiated with Indian tribes between 1778 and 1868 contain a clause insuring that the federal government will provide Indians with full educational opportunity in exchange for their ceded lands. This promise has not been fulfilled. Indian students are dropping out of Washington schools at rates estimated between 38-60 percent; schools have not been meeting the apparent needs of Indian children. This failure is attributed to several factors. Parents have been discouraged or excluded from school decision making policy; in two districts where Indians have had some control, dropout rates dropped appreciably. Many teachers are ignorant or indifferent to their Indian students' needs and backgrounds; necessity exists for preparing more Indian teachers and sensitizing non-Indian teachers. Disparity exists over funding. Because of existing federal regulations, over half the Indian students are ineligible for funds specifically designed to help them, yet most local and state school systems are unresponsive to their needs unless federal funds are available. Among the eight recommendations concluding the report are: establishing responsibility in one state agency for improvement of Indian education; developing and expanding teacher training programs specifically related to the needs of Indian children; and enacting legislation to ensure that both urban and reservation Indians participate fully in state and local educational systems. (DS)