This "final review draft" report provides an overview of the Bureau of Indian Affairs (BIA) elementary and secondary school system, and focuses on broad policy questions affecting the entire system. Part I outlines the history of Indian education and describes the state of BIA education today, including enrollment trends, descriptions of facilities, teachers, curriculum, and extracurricular activities at 28 selected schools, statistical breakdowns of student performance in 1986 on nationally standardized tests, funding and budget figures, and family background and high school performance of Indian students. Part II addresses the long-range future of BIA education, and raises some basic policy options concerning the management of BIA school facilities and the exercise of BIA educational leadership. The merits of these options depend in part on developing consensus as to the desired future of the BIA school program. Part III reviews recent research into the characteristics of effective schools, and suggests policy options that would apply the results of this research to BIA schools to improve the quality of teaching, curricula, and special programs. The final chapter proposes 15 short-term goals for revitalizing Indian education, goals which can serve as topics for tribal, public, and bureau discussions. The report includes 90 data tables and 46 references. A statement from the National Advisory Council on Indian Education, which cautions that reported Indian student test scores included special education students whereas reported non-Indian student test scores did not, is appended. (SV)