BEFORE the 104th Congress adjourns this year, local school boards across the United States may see some federal education funds coming back home marked ''Return to Sender.''
By consolidating federal programs and providing block grants to states, the new GOP leadership hopes to reduce the cost of education and return decisionmaking to the local level. ''The federal government has failed at education and the time has come to give the money back to local school boards and parents so they can run public education,'' says Sen. Phil Gramm (R) of Texas.
But critics worry that a diminished federal presence could leave schools bereft of funds and US education policy adrift. Hearings to scrutinize Washington's role in funding education have already begun on Capitol Hill. Later this week, former education secretaries William Bennett and Lamar Alexander are scheduled to outline an education bill sponsored by Sen. Dan Coats (R) of Indiana.
Other than calling for the elimination of government interest subsidies on college loans, the GOP ''Contract With America'' does not address education funding directly. But other high-priority goals in the Contract, such as welfare reform and the balanced-budget amendment, may require substantial cuts in federal education funds.
''The Republicans have to find billions of dollars somewhere without raising taxes. So the threat to education is very real in the first 100 days,'' says John Jennings, director of the Center for National Education Policy in Washington.
The need for spending cuts coupled with the fundamental GOP goal to shift responsibilities from the federal government to the states could lead to substantial changes.
Wisconsin Gov. Tommy Thompson (R) calls this a ''historic opportunity to redefine the state-federal relationship.'' At a House committee hearing two weeks ago, Governor Thompson said he would be willing to receive fewer federal dollars if the states are given more flexibility in using the money.
Beyond reallocation of dollars, the Republicans are also discussing the possibility of downgrading or even eliminating the Department of Education.
''If you devolve enough authority, responsibility, and resources away from the federal bureaucracy and into the hands of others, you could well wake up and no longer need a big federal bureaucracy to run what's left,'' says Chester Finn Jr., of the Hudson Institute, a former assistant secretary of education under President Reagan.
Some state school boards support the idea of abolishing the federal department. ''The Department of Education is far removed from the classroom and has become more of a burden to local school boards than a supportive partner,'' says Louis Grumet, executive director of the New York State School Boards Association.
In defending the status quo, Education Secretary Richard Riley argues that a federal agency can set national education priorities. ''A national priority gets around all the fragmentation of the states and their different priorities,'' he says.
Critics of decentralized education policy argue that giving more power to the states is inviting chaos. But Mr. Finn, a supporter, responds: ''The chaos is now when nobody is ultimately in charge. Today, it's a hodgepodge of federal, state, and local decisionmaking, each deferring in part to the others with nobody ultimately accountable.''
Since the states have constitutional responsibilities for education and the federal government does not, ''nobody in Washington should tell people at home what to do or how to do it,'' Finn says.
The federal government provides only about 7 percent of overall education funding. But the creation of block grants could shrink that percentage further over time.
Today, more than $18 billion a year is spent on hundreds of K-12 programs, many that are tied to regulations. ''Now we're talking about shifting responsibility to families, communities, and states,'' Finn says.
Under this new philosophy, programs such as compensatory education for poor children, bilingual and vocational training, and staff development might be funded through no-strings education block grants.
Another pet conservative proposal with rising prospects is private-school choice. As part of the effort to give parents' more power, the idea is to provide government vouchers allowing children to attend private schools at public expense.
THE voucher proposal showed signs of momentum last year when 42 senators voted for local test programs providing low-income families with federal vouchers redeemable at either public or private schools. Mr. Jennings says would receive majority support in the Senate.
Much of what the Republicans are proposing is targeted at undercutting the traditional education establishment, such as teachers unions. Yet education organizations may be caught off guard by the fast pace of the new Congress, Jennings says. ''In politics it's always the squeaky wheel that gets attention,'' he says, ''and many education groups are just beginning to become aware of what is happening in Washington.''
Each of the nearly 250 federal education programs has a constituency, however. ''I'd never underestimate the zeal, or the energy, or the intellect of the major education establishment groups to get the word out and mobilize their members,'' Finn says.