The school experience of American Indian and Alaska Native children hinges on the context in which their schooling takes place. This context includes the health and well-being of their families, communities, and governments, as well as the relationship between Native and non-Native people. Many Native children are in desperate straits because of the immense difficulties facing their families and communities. Native peoples suffer the highest unemployment and poverty rates in the United States. Low economic status leads to poor self-concept among Native children, and high unemployment forces those who complete schooling to leave their communities to find work. With limited access to health care, alcoholism and other forms of substance abuse, fetal alcohol syndrome, depression, and suicide are widespread in Native communities. Nevertheless, the budget of the Indian Health Service has remained constant for 10 years. Many Native children attend schools that discredit their cultural heritage and damage their self-esteem and motivation. What is needed in schools are culturally relevant curriculum, cross-cultural training for non-Native teachers, and increased participation by parents and community members. The gap between schools and Native communities must be narrowed so that Native students see the school as an extension of their cultural bonds. Tribal governments must become active partners in education. Specific recommendations are offered for rural, reservation, and urban Native communities. This paper contains 117 references. (SV)