The modernization of American education has been retarded by the assumptions that (1) educational effectiveness is directly proportional to expenditures, (2) a 25:1 student-teacher ratio is most effective for learning, (3) that which is taught is learned, (4) learning occurs only inside a school, (5) learning proceeds in neat subject matter packages, and that (6) books and lectures are the only instructional media. The financial crisis has created a need to examine these assumptions, and the investigation has produced discernible trends toward educational reform, such as greater recognition of the student as an individual, increased reliance on the whole range of community facilities, better management and planning at all levels of education, and revised procedures for educational financing. (Author/RA)