This report examines the status of nonpublic education and makes recommendations for halting the enrollment decline in nonpublic schools. The report warns that should this enrollment decline continue, the social and economic costs to the nation will be too costly in comparison with the lesser costs for public intervention. The panel recommends that (1) a four-pronged Federal assistance program for the urban poor be established, (2) Federal income tax credits to parents for a portion of nonpublic school tuition expenditures be set up, (3) a Federal construction loan program be established, and (4) tuition reimbursements on a per capita allocation formula in any future Federal aid program for education be established. In making its recommendations, the panel gave serious attention to constitutional issues. A related document is ED 053 644. (Author/JF)