One change that many local school officials say could make a big difference in improving student performance is a more equitable system of financing. Within the last six months, courts in Kentucky and Texas have set important precedents in addressing the issue of disparities in school spending. The Kentucky Supreme Court ruled in June that the present system of local financing is unfair to students from poor areas and ordered the state to come up with a new system. In October, the Texas Supreme Court found the state's system of school financing similarly unconstitutional and ordered authorities to come up with a new system by May.

University of Iowa educational administration professor George Chambers argues that to be really fair, many districts will need more than equal help for catch-up purposes. ``To attack the problem of American public education, we need to attack the problem of the underclass,'' he says. ``We know from studies that as the income of the family increases, so do the test scores. ... We just can't have an equitable system of education without some federal assistance.''

Another development that may improve student performance is the broadening role of school choice. More than a dozen states allow parents to choose a public school anywhere in the state. Though parents often have to foot the transportation bill, the money usually follows the child to the new school.

``To some extent the American education system has been based on a concept of monopoly for efficiency and effectiveness. Now we're starting to see that basis crumble,'' says Mr. Chambers.

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