The report examines progress for the school years 1981-82 and 1982-83 in implementing P.L. 94-142, The Education for All Handicapped Children Act. Following an executive summary, an analysis of four major aspects of the law's implementation is detailed. A section on students receiving a free appropriate public education cites data on the number of students served, services for children from birth through age 5, services to secondary and postsecondary aged students, services to institutionalized and previously institutionalized students, and personnel. The next section provides an update on the implementation of key provisions of the Act assuring the rights of handicapped children. Information is provided on the least restrictive environment provision, precedural safeguards, protection in evaluation, and initiatives of the Department of Education, Special Education Programs (SEP). The third section reports on assistance to states and localities in educating handicapped children. Discussed are the amounts and use of federal, state, and local funds for serving handicapped children; technical assistance to the states; SEP review of state programs; and other SEP administrative responsibilities. The final chapter examines efforts to assess and assure the effectiveness of programs educating handicapped children. Reported are federal evaluation efforts and studies, procedures being implemented for state and local evaluation efforts and state and local evaluation studies. A major portion of the document consists of appendixes concerned with evaluation of the Education of the Handicapped Act, discretionary programs administered by SEP, and data tables. The data tables include child count tables (by state, age, and handicapping condition); personnel tables (special education teachers, other staff, and student teacher ratio); least restrictive environment tables (number and percent of children served in different educational environments by age and state); population and enrollment tables (census projections by state and age); and a financial table showing state grant awards under P.L. 94-142 for the fiscal years 1977-84. A final appendix provides background and methodology concerned with determining the costs of special education and related services. Additional tables and figures present data throughout the report. (DB)