This final report is part of a national assessment on the Chapter 1 Compensatory education program. The assessment, which began in 1984, includes national data through 1987. The topics covered in the report are the following: (1) program framework; (2) findings and implications of the national assessment; (3) distribution, character, and selection of the schools and students; (4) overview of services; (5) effective educational practices in Chapter 1 programs; (6) relationship between Chapter 1 and the regular school program; (7) Chapter 1 in the school setting; (8) services to private school students; (9) effects of new Chapter 1 standards for local procedures; (10) effects of reduced application and reporting requirements; (11) organization and staffing of Chapter 1 programs; (12) state and federal oversite and assistance activities; (13) state and local administrative burden; (14) legislative options; and (15) options for policymakers. Four appendices include: (1) Congressional Mandate and Index of Issues; (2) National Assessment of Chapter 1 surveys and studies; (3) Administrative History and Status; and (4) Description of School and District survey samples, standard error calculation and significance Tests. (VM)