Case studies of local development projects in Scotland, Norway, Australia, and the United States (Minnesota) indicate that federal education programs of a "generative" nature (those linking educational improvement to other improvement efforts, emphasizing process, and stimulating grass-roots participation) are most likely to promote education as an aid to rural community development. Analysis of NIE, USOE, and Assistant Secretary for Education programs reveals that while rural schools receive a fair share of federal monies under these programs, they may be at a disadvantage when allocation formulas are based on numbers rather than percentages. Localities may suffer from policies that address only individual or national needs. There is need for a careful analysis and restructuring of federal programs to emphasize a long-range view and to integrate programs and services in order to approach rural problems comprehensively. Specifically, programs with special potential for rural community development and education should be identified and their guidelines overhauled to accomodate the rural sector. Those federal programs for rural districts which could feasibly be combined should be bundled into "block grants". Appropriate parties should examine the "enabling" potential of all federal education programs and provide for it when it is absent. (SB)